SYDNEY (BLOOMBERG) - Asian stocks rose for the first time in four days on Wednesday (Nov 16) and South Korea's won strengthened as volatility in global markets shows signs of dying down a week after Donald Trump's shock US election victory.
Energy shares led gains on the MSCI Asia Pacific Index after crude oil posted the biggest jump in seven months amid optimism Opec members will finalize a deal to cut output.
The won rose versus all of its major peers, while Bloomberg's dollar index held near a nine-month high and New Zealand's dollar weakened. Japan's 10-year bond yield stayed at zero, having ended almost eight weeks of negative rates in the last session, and Australia's stayed near its highest level since April.
Trump's victory sent bond yields surging around the world driven by signals he'll spend as much as US$1 trillion to rebuild infrastructure in a move that investors are betting will boost inflation and make the Federal Reserve speed up the pace of US interest-rate increases. Fed Governor Daniel Tarullo said on Tuesday that a rate rise next month is more likely than before, with fed funds futures implying a 94 per cent probability of an increase.
"Things might have got a little bit overdone with the market having got very excited about reflation and what it's going to mean," said Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about US$7.2 billion. "Most of the sharp adjustment is behind us now and from here you'll need to see tangible evidence of some of those policy moves."
More light may be shed on the outlook for US monetary policy with Fed bank presidents James Bullard, Neel Kashkari and Patrick Harker all scheduled to speak on Wednesday.
The MSCI Asia Pacific Index added 0.6 per cent as of 9:17am Tokyo time, with a gauge of energy stocks climbing 1 per cent.
Benchmarks gained across regional markets open for trading, with Japan's Topix index headed for its highest close in nine months.
The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major peers, was little changed after surging 3.1 per cent in the five sessions since Trump's victory in the Nov 8 election. The won rose 0.3 per cent and the Kiwi weakened 0.2 perc ent.
Futures on the S&P 500 Index were little changed after the underlying gauge climbed 0.8 per cent. The Dow Jones Industrial Average closed 0.3 per cent at a record high.
Crude oil declined 0.3 per cent to US$45.69 a barrel in New York, after jumping 5.8 per cent on Tuesday. Members of the Organization of Petroleum Exporting Countries are holding discussions to secure an agreement to cut production and stabilize prices.