AFP: Asian investors headed into the weekend cautiously upbeat yesterday after US traders took a breather from their recent run of records while uncertainty about Donald Trump’s tax plans are keeping the dollar reined in.
Wall Street’s three main indexes stepped back after clocking up a number of all-time highs in recent weeks fuelled by hopes for the earnings season and confidence the US economy is in good shape. But dealers across Asia built on the previous day’s gains, with Tokyo pushing on after hitting a 21-year high earlier in the week.Japan’s Nikkei rallied one percent, although embattled Kobe Steel fell nine percent on a report that its widening quality scandal has spread to more than 30 foreign customers, including Boeing and General Motors. the firm has shed more than 40 percent since the story broke last weekend.
Sydney climbed 0.3 percent and Singapore added 0.5 percent, while Shanghai ended 0.1 percent higher and Hong Kong was 0.1 percent up.
Wellington, Taipei, Manila and Jakarta also rose but Seoul slipped 0.1 percent.
In early European trade London slipped 0.3 percent, Paris was flat and Frankfurt edged up 0.1 percent. The dollar was struggling to break out against its major peers as questions swirl over the future of Trump’s promised tax plans, with some members of his Republican party said to be concerned about the possible effects on the country’s debt mountain.
Last month’s release of a proposal outlining massive changes to the tax code boosted the greenback but the unit has pared some of those gains.
“There appeared to be a significant compromise brewing amongst Republicans (on Thursday) but given the bloated nature of the current tax code, for every compromise tabled there seems to be another band-aid fixed elsewhere,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
“Understanding and patience will be the name of the game for this to pass but it would not surprise me if we found ourselves back dead in the water next week.” Easing concerns about Spain’s Catalan independence crisis provided support to the euro.
And the pound, which has been hurt by uncertainty surrounding Prime Minister Theresa May, was up after a report in a German newspaper saying Britain could get a two-year extension to complete Brexit as officials haggle over terms of the divorce.