Asian stocks extend gains, driven by US tech surge

Asian stocks climbed after strong performances by major US tech firms helped extend the year-end rally in US equities on Tuesday. Treasuries edged lower as demand for safe-haven assets waned.

The MSCI Asia Pacific Index advanced for a fourth day, the longest streak since September, led by Japan and Taiwan, News.az reports, citing Bloomberg.

Japanese shares also rallied after central bank governor Kazuo Ueda on Wednesday avoided giving any clues about a possible interest-rate hike. Trading was relatively thin with Australia and Hong Kong still shut for the Christmas break. US equity futures rose.

Equity bulls are pinning their hopes on what’s known as the “Santa Claus Rally” in which stocks rise during the final five trading sessions of a year and the first two of the new one. This time around that window started Tuesday.

“A follow-through from pre-Christmas momentum will mean a continued drift higher for Asian markets,” said Jun Rong Yeap, a market strategist at IG Asia Pte in Singapore. “Weakness in the yen on the back of recent Fed-BOJ policy divergence has offered some support for Japanese equities in today’s session, coupled with the year-end positive seasonality around the Santa Claus rally.”

Most major markets in Europe will stay shut Thursday, while trading will take place as normal in the US.

Japanese retail shares gained after the country agreed with China to introduce more measures to promote tourist visits. The two nations also agreed that Beijing’s top diplomat should visit Japan in 2025, adding to signs the two nations are repairing ties that have been strained in recent years.

Japan Airlines Co. slipped as much as 2.5% after the carrier said it’s experiencing issues with its systems due to a cyberattack that may impact its flights. Toyota Motor Corp. was the largest contributor to gains in the MSCI Asia Pacific Index, following a report the automaker is planning to double its target for return-on-equity.

Bank of Japan Governor Ueda on Wednesday avoided giving a clear signal he might raise rates next month by reiterating the need to keep monitoring risks for the economy in comments that nudged down the yen.

Shares of Chinese computing-equipment makers advanced after the nation said it planned to include the sector into the investment scope of local government special bonds. Kingsignal Technology Co. surged as much as 20% as did Broadex Technologies Co.

Treasury 10-year yields climbed two basis points to 4.61% before the US auctions $44 billion of seven-year notes on Thursday. The dollar was mixed against its Group-of-10 peers.

Since 1950, the S&P 500 has generated average and median returns of 1.3% during the “Santa Claus” period, widely outpacing the market’s average seven-day gain of 0.3%, according to Adam Turnquist at LPL Financial.

News.Az