Asia shares follow Wall Street higher, yen drops

Published On: December 28, 2021Categories: Stocks & Shares1.4 min read

On Tuesday, Japan’s Nikkei added 1.1%, and hit its highest since Nov. 26, while MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.23%

Shares is Asia gained on Tuesday on another record-setting day on Wall Street amid strong retail figures, while the safe-haven yen lost ground as traders stayed in riskier currencies and asset classes like equities.

A variety of asset classes from oil to Japan’s Nikkei Stock Average are now trading at around one-month highs, having clawed back losses from late November when the Omicron variant of COVID-19 first emerged and sent investors scurrying for safe havens.

As the worst fears of the impact of the new variant have subsided, investors have been returning to risk assets.

On Tuesday, Japan’s Nikkei added 1.1%, and hit its highest since Nov. 26, while MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.23%. Recent losses by index heavyweights like Alibaba and Tencent mean the broad benchmark is still well off its late November levels.

The risk-on sentiment continues, said Edison Pun, senior market analyst at Saxo Markets in Hong Kong, who said neither Omicron nor China’s coronavirus situation was troubling investors.

China reported 209 new confirmed coronavirus cases for Dec. 27, up from 200 a day earlier, mostly in the northwestern province of Shaanxi, where Xian, the provincial capital, is in lockdown.

Overnight the S&P 500 index added 1.38% to finish at a record on Monday as strong U.S. retail sales underscored economic strength, while the Dow Jones Industrial Average (DJIA) jumped 0.98% and the Nasdaq Composite gained 1.39%.

The risk-on mood could be seen across asset classes.

Meanwhile the safe-haven yen dropped to 114.87 per dollar, having hit a one-month low earlier in the session.

The dollar, also a safe haven, in turn lost ground on other currencies, for example the pound, which gained 0.5% on Monday and last traded near a five-week high of $1.3445.

About the Author: Jonathan Adams

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