Asian Stocks Extend Gains
Asian markets rallied on Thursday, buoyed by the positive momentum of U.S. equities. The MSCI Asia Pacific Index advanced for the fourth consecutive day, marking its longest winning streak since September. Japan and Taiwan led the gains, with Japanese stocks particularly benefiting from the Bank of Japan’s Governor Kazuo Ueda avoiding any indication of a near-term interest rate hike. Trading volumes were subdued, as Australia and Hong Kong remained closed for the Christmas holiday, though U.S. equity futures showed modest gains.
The so-called “Santa Claus Rally,” a seasonal trend where stocks rise in the final trading days of the year and the first two of the new year, fueled optimism. According to market strategist Jun Rong Yeap of IG Asia Pte, “Pre-Christmas momentum is likely to carry forward, supporting Asian markets.” He also noted that the weakening yen, driven by differing monetary policies between the Federal Reserve and the Bank of Japan, added to Japanese market strength.
Sector Highlights and Regional Developments
Japanese retail stocks climbed after Japan and China agreed to enhance tourism and foster better relations, including a planned visit by China’s top diplomat in 2025. Major retail players like J. Front Retailing Co. surged by up to 9%, while Isetan Mitsukoshi Holdings Ltd. and Takashimaya Co. also posted gains. However, Japan Airlines Co. dropped by 2.5% due to a cyberattack disrupting its systems.
Elsewhere, Toyota Motor Corp. was a major contributor to the MSCI Asia Pacific Index’s rise, following reports of its plans to double its return-on-equity target. In China, stocks of computing-equipment makers soared after the government announced plans to include the sector in local government bond investments. Kingsignal Technology Co. and Broadex Technologies Co. saw gains of up to 20%.
Global Outlook and Market Trends
In the U.S., the S&P 500 and Nasdaq 100 rose 1.1% and 1.4%, respectively, on Tuesday, extending their annual gains to 27%. Analysts like Matt Maley from Miller Tabak emphasized the dominance of tech stocks in driving market leadership, with institutional investors favoring big-cap tech names in their portfolios.
Treasury yields also edged higher, with the 10-year yield climbing to 4.61% ahead of a $44 billion auction of seven-year notes. In the commodities sector, oil prices rose slightly amid China’s economic stimulus measures and expectations around U.S. stockpiles. Gold prices also edged up, reflecting a cautious optimism in global markets.
Key upcoming events include U.S. initial jobless claims data and Japan’s Tokyo consumer price index (CPI), retail sales, and industrial production reports, which may influence market sentiment in the coming days.
