Asian shares rise on U.S. stimulus fix, Nikkei hits 30-year high

FILE PHOTO: A man wearing protective face mask, following an outbreak of the coronavirus disease (COVID-19), walks in front of a stock quotation board outside a brokerage in Tokyo, Japan, March 10, 2020. REUTERS/Stoyan Nenov

December 29, 2020

By Stanley White and Koh Gui Qing

TOKYO/NEW YORK (Reuters) – Asian shares jumped on Tuesday, with Japanese stocks hitting a 30-year high, as hopes that a long-awaited U.S. pandemic relief package would be expanded and a Brexit trade deal supported investor risk appetite.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.46%. Australian stocks rose 0.55%. Japan’s Nikkei leapt 1.63% to its highest since August 1990, while shares in China rose 0.1%.

Futures for the S&P 500 added 0.32%.

The dollar nursed losses against major currencies and Treasury yields rose after U.S. President Donald Trump’s approval of a stimulus package related to the coronavirus outbreak increased risk appetite.

The positive mood also helped oil futures rise during Asian trading in hopes for an acceleration in economic activity.

The U.S. House of Representatives had voted earlier to increase stimulus payments to qualified Americans to $2,000 from $600, sending the measure on to the Senate for a vote.

While it is not clear how the measure will fare in the Senate, President Donald Trump’s signing on Sunday of a $2.3 trillion pandemic bill, which included the $600 payments, had sent shares on Wall Street to record highs overnight as it increased optimism about an economic recovery.

“With the Brexit … and the U.S. stimulus deal now in the rear-view mirror, there is a sense of relief that we have avoided the respective worst-case scenarios,” said Stephen Innes, chief global market strategist at Axi, a broker.

Firmer demand for riskier assets kept the U.S. dollar, which is often seen as a “safe-haven” asset, on the back foot. It was down 0.02% against a basket of major currencies.

Shorting the dollar has been a popular trade recently and calculations by Reuters based on data released by the Commodity Futures Trading Commission on Monday suggested this could endure. Short positions on the dollar swelled in the week ended Dec. 21 to $26.6 billion, the highest in three months.

The dollar index against a basket of six major currencies stood at 90.241, not far from the lowest in more than two years.

Sterling edged up to $1.3483 following the confirmation last week of a trade UK-EU trade deal that was widely expected.

A sluggish dollar bolstered gold prices, which rose 0.37% to $1,878.06 an ounce.

Oil prices recovered a touch after falling overnight on concerns that new travel restrictions on the back of the COVID-19 pandemic would weaken fuel demand, and as the prospect of increased supply dragged on prices.

Brent crude rose 0.69% to $51.21 per barrel. U.S. crude was up 0.71% at $47.96 a barrel.

More U.S. fiscal stimulus has also eased concerns about the threat posed by new variants of the coronavirus identified in Britain and South Africa.

The yield on benchmark 10-year Treasury notes rose to 0.9414%, but the two-year eased to 0.1270%.

(Reporting by Stanley White and Koh Gui Qing; Editing by Sam Holmes and Stephen Coates)

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Japan’s Suga slips to 42% approval rating in new Nikkei poll

TOKYO — Public support for Japanese Prime Minister Yoshihide Suga’s government has gone underwater for the first time as officials have struggled to respond to COVID-19.

The approval rating of Suga’s cabinet sank to 42% in a weekend Nikkei/TV Tokyo survey — down 16 percentage points from the previous poll, taken in November. Disapproval climbed 16 points to 48%.

The decline in approval was the largest since October 2010, during Naoto Kan’s stint as prime minister. Back then, the government had recently released crewmembers of a Chinese fishing vessel that had collided with vessels of the Japan Coast Guard.

For Suga, the new poll marks a steep drop-off from the 74% approval rating his cabinet enjoyed right after he took office in September. The government’s coronavirus response appears to be the biggest cause of the slide.

The survey shows that 59% of respondents disapprove of the handling of COVID-19, up 11 points from November. The disapproval number is the highest since the coronavirus response question began being asked in February.

Disapproval of the virus response previously peaked at 55% in May, the month after then-Prime Minister Shinzo Abe had declared a state of emergency.

A lack of leadership was the top reason for not supporting Suga’s cabinet, at 48%. This was followed by poor policy measures at 36%.

The confluence of money and politics also factored into the low approval rating. Abe last week denied knowing that his office paid for lavish dinner parties held for his supporters. An aide was eventually fined for failing to record expenses.

Abe’s explanation failed to convince 74% of respondents in the latest poll. Tokyo prosecutors on Friday raided the offices of Takamori Yoshikawa, a former agriculture minister, over allegations of receiving money from an egg production company. The poll shows 82% of respondents do not find the scandal acceptable.

The poll was conducted by Nikkei Research over the phone from Friday to Sunday via random-digit dialing. It received 933 responses from men and women aged 18 and older, for a response rate of 47.4%.

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