Asia: Stocks near a record high, US dollar declines

[TOKYO] A measure of Asian stocks flirted with a record high on Thursday in muted trading after a listless US session overnight offered little direction ahead of New-Year holidays.

The MSCI Asia Pacific Index of stocks was heading for a record close as of early afternoon trading, after recouping losses that began in late November in one of several waves of profit taking seen in a standout year. Japanese benchmarks dipped toward the close in subdued trading, after Australian shares edged up. Shares in Hong Kong and Seoul were higher.

The US dollar fell for a second day as 10-year US Treasury yields held below the 2.5 per cent mark that they briefly reached last week. A soft US dollar and limited moves in longer-dated US yields has been a surprising feature in a year when the Federal Reserve raised interest rates three times and started shrinking its balance sheet.

Raw-materials prices extended recent gains, with the Bloomberg Commodity Index edging up Thursday after closing at a six-week high yesterday. Oil traded just under US$60 a barrel. Bitcoin retreated again, extending a sell-off that began last week, as South Korean regulators stepped up scrutiny of their citizens' dealings with cryptocurrencies.

Japan's Topix Index fell 0.6 per cent as of 2.35 pm in Tokyo, and the Nikkei 225 Stock Average dropped 0.5 per cent.

Hong Kong's Hang Seng Index climbed 0.7 per cent and China's Shanghai Composite rose 0.7 per cent. South Korea's Kospi was up one per cent.

Australia's S&P/ASX 200 Index advanced 0.3 per cent.

Futures on the S&P 500 Index were little changed after the underlying gauge rose 0.1 per cent Wednesday.

Currencies The yen strengthened 0.4 per cent to 112.89 per US dollar.

Euro rose 0.3 per cent to US$1.1928.

The pound sterling gained 0.2 percent to US$1.3430.

The Bloomberg Dollar Spot Index slid 0.3 per cent after dropping 0.3 per cent Wednesday.

Bonds The yield on 10-year Treasuries was at 2.42 percent after tumbling about 7 basis points Wednesday.

Australian 10-year yields were at 2.67 percent, down more than 2 basis points.

Commodities West Texas Intermediate crude was up 0.3 percent, at $59.77 a barrel.

Gold futures rose 0.3 percent to $1,291.64 an ounce LME copper futures were little changed at US$7,247.00 per metric ton after closing Wednesday at the highest in about four years.

BLOOMBERG