TOKYO (Reuters) – Asian equities rose to a record high Wednesday after U.S. Treasury Secretary candidate Janet Yellen backed a hefty tax relief package to help the world’s largest economy weather a slump caused by the pandemic.
At a confirmation hearing on Tuesday, he said the benefits of a large stimulus package outweigh the expenses of a higher debt load.
US President-elect Joe Biden, who will be sworn in on Wednesday, last week presented a proposed $ 1.9 trillion stimulus package to revive the economy and accelerate vaccine distribution.
“There will be large-scale fiscal spending. The Fed is trying to hit two percent inflation and full employment, which still looks a long way off, so it will keep interest rates low for some time and market sentiment should remain solid, “said Yoshinori Shigemi, macro Fidelity International strategist.
MSCI’s Asia-Pacific Index outside of Japan rose 0.95%, reaching its highest level ever.
Hong Kong’s Hang Seng rose 1.0% to approach its 2019 peak, while Australian equities added 0.6% to reach an all-time high. Japan’s Nikkei, however, slipped 0.45% on profit taking.
US Nasdaq futures gained 0.4%, with Netflix shares climbing 12.6% after the bell as the streaming pioneer reported strong subscriber growth and predicted it will no longer need to rise. the debt.
The results came after all three of Wall Street’s major indices posted solid gains on Tuesday.
US President Donald Trump, in a farewell speech released Tuesday, touted his legacy and wished the new administration luck even as he refrained from recognizing his successor by name.
Biden will take office on Wednesday with unprecedented security measures following the January 6 assault on the Capitol.
“The transition is likely to be smooth and hassle-free, so this is another reason to support markets in general,” said Yasutada Suzuki, head of emerging market investments at Sumitomo Mitsui Bank.
In the currency market, the dollar was hovering against other currencies.
The euro was trading at $ 1.2148, up 0.15% and from Monday’s 1.5-month low of $ 1.2054, drawing support from a ZEW investor sentiment survey that beat predictions and the Italian government survived a vote of confidence.
The yen moved slightly to 103.81 against the dollar, while the Chinese yuan rose about 0.1% to 6.4741 per dollar.
Oil prices have risen in the hope that Biden’s proposed stimulus will boost economic output.
US crude oil futures rose 0.3% to $ 53.15 a barrel, while the international benchmark Brent futures rose 0.3% to $ 56.09 a barrel.
Additional reportage by Jessica DiNapoli in New York, edited by Richard Pullin and Ana Nicolaci da Costa