Asian stocks climb again as Nikkei hits new high
Asian stocks rose for a second consecutive day in early trading on Tuesday, driven by a continued rally in Tokyo’s benchmark following Japanese Prime Minister Sanae Takaichi’s significant election victory over the weekend. MSCI’s broadest index of Asia-Pacific shares outside Japan increased by 0.4 per cent, while the Nikkei 225 surged by 2.1 per cent, marking its third consecutive day of gains and reaching a new record high. US equity futures experienced a slight decline following a two-day rally, with S&P 500 e-mini futures down 0.1 percent, partially reversing the gains made on US Market overnight. On Monday, the S&P 500 rose 0.5 percent and the Nasdaq Composite gained 0.9 percent as technology stocks found their footing following last week’s AI-sparked selloff. “Overall, we actually are quite positive on the economic situation, although we see maybe some cracks,” said Kees Verbaas.”The investment programs of the large companies are increasing rather than decreasing… which typically is good for economic activity,” he added. “Much of the AI supply chain is made feasible by emerging markets.”
As several important economic reports are set to be released later this week, including retail sales, inflation, and delayed payrolls data, White House economic adviser Kevin Hassett stated on Monday that US job gains may decline in the upcoming months. He attributed this potential slowdown to the Trump administration’s immigration policies, which are hindering labor force growth, alongside the impact of new AI tools that are enhancing productivity. The US dollar index, which measures the greenback’s strength against a basket of six currencies, was trading steady near its lowest levels of the month at 96.97. The index experienced its largest single-day decline in two weeks on Monday, prompted by a report indicating that Chinese regulators have recommended financial institutions limit their holdings of US Treasury bonds, citing concerns over concentration risk and market volatility.
Treasury Secretary Scott Bessent stated on Monday that senior US Treasury staff traveled to China last week “to strengthen channels of communication” between Washington and Beijing. In the offshore market in Hong Kong, the Chinese yuan held steady against the dollar, which remained unchanged at 6.9167 yuan. “Elevating the renminbi’s global role is moving up the policy agenda,” analysts wrote in a research note. Beijing’s primary objective is not to contest the dollar’s supremacy but to mitigate its own susceptibility to it. The yield on the US 10-year Treasury bond increased by 0.2 basis points, reaching 4.196 percent.
Market pricing consistently suggests that the Federal Reserve is likely to maintain its current stance until June. Fed funds futures indicate a 17.7 percent implied probability of a 25-basis-point rate cut at the US central bank’s upcoming two-day meeting on March 18, down from an 18.4 percent chance reported on Friday, as per the CME Group’s FedWatch tool. In commodities markets, WTI crude experienced a decline of 0.1 per cent, trading at $64.15 a barrel. Gold declined by 0.9 percent to $5,018.59 per ounce, whereas silver dropped 2.7 percent to $81.13 per ounce. Bitcoin decreased by 0.9 percent, settling at $69,756.85, whereas ether fell by 1.1 percent to $2,098.21.
