Asian stocks gain on Kuroda, US tax reform hopes

Pedestrians walking in front of a display flashing charts of the Nikkei key index of the Tokyo Stock Exchange in Tokyo.
Pedestrians walking in front of a display flashing charts of the Nikkei key index of the Tokyo Stock Exchange in Tokyo.PHOTO: AFP

SYDNEY/TOKYO (BLOOMBERG) - Asian stocks climbed on optimism for a US tax overhaul. Weakness in the yen pushed Tokyo shares higher after Bank of Japan Governor Haruhiko Kuroda said he will keep accommodative policy in place.

The S&P 500 Index had its second best day since March overnight as US Treasury Secretary Steven Mnuchin said plans to reform taxes have progressed. The euro was steady after a police officer was shot in Paris just days before France's presidential election starts.

Mnuchin's comments eased growing concern that President Donald Trump's fiscal agenda is foundering, while the odds for a rate hike in June climbed toward 60 per cent after Dallas Fed President Robert Kaplan reiterated that three increases this year remain appropriate. Earnings continued to paint a mixed picture on the health of the economy, while investors kept an eye on a series of elections in Europe and tensions around North Korea and Syria that threaten to ratchet up market risks.

"It looks like the Trump administration wants to reignite the market's expectations for policies," said Hideyuki Ishiguro, a senior strategist at Daiwa Securities in Tokyo. "Kuroda's comments didn't diverge from his past stance, but since the yen had strengthened a fair amount it became a trigger for some profit taking."

The yen traded at 109.35 per US dollar as of 9:08am in Tokyo after dropping 0.4 per cent on Thursday.

Japan's Topix index rose 0.8 per cent, heading for its first weekly gain in more than a month. Australia's S&P/ASX 200 Index climbed 0.6 per cent. South Korea's Kospi index added 0.5 per cent. Hang Seng futures were up less than 0.1 per cent.

Futures on the S&P 500 were up less than 0.1 per cent. The underlying gauge rose 0.8 per cent Thursday, with American Express surging nearly 6 per cent to pace gains in the financial group after its results topped estimates.  The Stoxx Europe 600 Index edged higher by 0.2 per cent on Thursday after swinging between gains and losses.

The yield on 10-year Treasuries rose two basis points to 2.23 per cent Thursday after a five-basis-point advance Wednesday.

West Texas Intermediate crude oil fell 0.3 per cent to US$50.27 a barrel Thursday, after tumbling 3.8 per cent Wednesday when a report showed U.S. gasoline supplies increased for the first time since February, while crude output keeps rising.