Asia: Markets track US surge as Trump fear eases

[HONG KONG] Asian markets pushed higher on Wednesday, tracking a record close on Wall Street as investor concerns about Donald Trump's lack of domestic policies were eased, while the dollar held gains against the yen.

After a slack start to the year for global markets, US traders took up the reins on Tuesday to press back on with the November-December Trump rally after the tycoon gave the green light to two big oil pipeline deals.

The new president signed off on the controversial Keystone XL pipeline - which would carry oil from Canadian tar sands to US Gulf Coast refineries - and another crossing in North Dakota.

The move reverses decisions taken recently by Barack Obama and is the latest effort to wipe out the former president's legacy.

Also on Tuesday it emerged that House Speaker Paul Ryan signalled support for public works spending, while reports surfaced that Senate Democrats will unveil a US$1 trillion infrastructure plan, offering the president their support if he backs it.

The developments soothed anxiety on markets that promised economy-firing spending and tax-cutting measures were being put on the back burner by Mr Trump in favour of reviewing global trade deals.

On Wall Street the S&P 500 and Nasdaq ended at all-time highs, while the Dow got within spitting distance of breaking the 20,000-point barrier for the first time.

In Asia on Wednesday, Hong Kong rose 0.3 per cent, Shanghai edged up 0.1 per cent, Sydney added 0.4 per cent and Seoul was 0.1 per cent higher, while Singapore rallied 0.6 per cent.

There were also gains in Wellington, Manila and Jakarta.

Tokyo ended the morning 1.1 per cent higher as exporters were supported by a weaker yen.

The dollar flirted with 114 yen late Tuesday before paring the gains but it remains well up from the levels below 113 touched earlier in the day as dealers cheered the events in the US.

However the greenback is down about four per cent from its highs seen at the end of last month.

And former top Japan currency official Eisuke Sakakibara warned in a Bloomberg News interview the US unit could fall towards 100 yen by the end of 2017 as Mr Trump's promise of four per cent economic growth falls flat.

"Four per cent US economic growth is impossible. In all likelihood it'll remain around two per cent or 2.5 per cent, and that'll be the end of Trump fever," warned Mr Sakakibara, who was dubbed Mr Yen for his influence of exchange rates in the 1990s.

In other forex trade, the Canadian dollar rallied more than one per cent against the greenback following Mr Trump's oil pipeline decision.

The move also weighed on oil prices in early Asian trade on fears it will add to a global glut of crude, despite the Opec exporting cartel's agreement in November to cut output.

AFP