Tokyo: Asian stocks advanced after the Trump administration’s plan to roll back financial regulations sparked a rally in global bank shares. The dollar was mixed as a US jobs report showed weaker wage growth.
Equities from Japan to India climbed after the S&P 500 Index closed within a point of its all-time high on Friday. Mitsubishi UFJ Financial Group jumped to the highest level of the year to pace gains in bank stocks, while Chinese insurers in Hong Kong rallied. The South Korean won extended the biggest weekly advance since July, while the Bloomberg Dollar Spot Index was flat. Oil climbed above $54 a barrel, after three straight weeks of gains.
The latest US jobs report showed weak wage growth even as hiring picked up, bolstering the Federal Reserve’s case for a gradual approach to tightening. Odds for a Fed rate hike in March are lower than a week earlier, even after San Francisco Fed President John Williams reiterated that three rate hikes this year is a reasonable guess. The data capped a week that saw monetary policy makers in Japan, the UK and the US stand pat as they assess the impact of America’s new leadership on global growth.
Global financial shares are rallying for a second day after US President Donald Trump moved to roll back bank regulations enacted to stop the next financial crisis. The group has soared 38 per cent from a low a year ago. Banks in Japan are also benefiting from robust earnings, as surging global bond yields and market volatility since Trump’s election victory have been a boon to fixed-income trading.
Central banks will remain in focus this week, with Australia, India, New Zealand, Philippines, Thailand, and Sri Lanka scheduling separate meetings on monetary policy.
The earnings parade continues with NTT, SoftBank Group, Rio Tinto, SingTel, Nissan Motor, Fuji Heavy, Daikin Industries and Mitsui among the companies that would be reporting.
The MSCI Asia Pacific Index gained 0.4 per cent as of 3:35pm in Tokyo. Japan’s Topix index rose 0.4 per cent, after the biggest weekly decline since November.
Mitsubishi UFJ jumped 3.4 per cent after third-quarter profit unexpectedly rose 17 per cent andYahoo Japan soared 15 per cent, the most since January 2013, after earnings beat estimates on strong growth in advertising and online shopping from smartphones.
Hong Kong’s Hang Seng advanced 0.7 per cent, while the Hang Seng China Enterprises Index rose 1.5 per cent as insurers surged amid speculation Chinese pension funds are about to enter the stock market.
India’s Sensex added 0.8 per cent to the highest since October, Taiwan’s Taiex jumped 0.9 per cent to a June 2015 high and New Zealand’s market was closed for a holiday. The S&P 500 climbed 0.7 per cent to 2,297.42 on Friday, within a point of its all-time closing record set Jan. 25.