TOKYO : Asia-Pacific share indexes rallied on Thursday, following Wall Street’s lead, and the dollar held just below a two-month high versus the yen amid signs the United States might be close to a deal to raise the debt ceiling
and avert a disastrous default.
On Wednesday, President Joe Biden and top U.S.
congressional Republican Kevin McCarthy underscored their determination to reach an agreement soon, pledging to negotiate directly on a deal amid estimates the Treasury could run out of money by the start of June.
“It is possible to get a deal by the end of the week,” McCarthy told reporters. “It’s not that difficult to get to an agreement.”
As investors drew comfort from that reassurance, MSCI’s broadest index of Asia-Pacific shares pushed 0.78 per cent higher.
“Markets have chosen to be optimistic,” Rodrigo Catril, senior FX strategist at National Australia Bank, wrote in a client note.
“History, of course, tells us that a deal is more likely than not to be reached on the 11th hour, suggesting there is still room for a few bad headlines,” he added, noting as a case in point, “Treasury has almost run through all of its authorised extraordinary measures to keep paying the bills.”
Japan’s Nikkei continued to outperfrom the region, surging to a fresh 20-month peak of 30,667.13, before last trading 1.2 per cent higher at around 30,450. Any advance above 30,795.78 would take it to the highest since 1990, when Japan’s bubble economy had still to burst.
Hong Kong’s Hang Seng gained 0.93 per cent. Mainland blue chips rose 0.37 per cent.
Australia’s stock benchmark gained 0.59 per cent, and received an additional tailwind from domestic data showing an unexpected fall in employment in April, taking some pressure off the Reserve Bank for further tightening.
Source: Reuters
