By Wayne Cole
SYDNEY, Dec 22 (Reuters) – Asian share markets rose on Monday tracking tech-driven gains on Wall Street, while the yen wallowed at all-time lows against the euro and Swiss franc as higher interest rates at home did nothing to deter speculative sellers.
Turnover was sparse in what is a holiday-shortened week for much of the world but the path of least resistance was higher ahead of delayed data that is forecast to show the U.S. economy had continued to grow strongly in the third quarter.
Median forecasts tip annualised growth of 3.2%, due in part to a sharp pullback in imports after a run-up earlier in the year ahead of the introduction of tariffs.
Yet analysts at BofA had some words of caution, noting their measure of investor sentiment had moved into extreme bullish territory at 8.5, often a prelude to a reversal.
“Readings above 8.0 have often preceded pullbacks, with global equities declining a median 2.7% over the following two months, with a 63% hit rate,” they wrote in a note.
“Sentiment data reinforce the cautionary signal: the Fund Manager Survey shows most bullish sentiment in 3-1/2 years, driven by expectations of rate, tariff, and tax cuts.”
For now the fear of missing out seemed to be greater and S&P 500 futures added another 0.2%, with Nasdaq futures up 0.3%.
Japan’s Nikkei climbed 1.5%, extending Friday’s bounce as a steep decline in the yen promised to boost export earnings for Japanese corporates.
The yen selloff came as the Bank of Japan raised rates to a 30-year high of 0.75%, putting heavy selling pressure on government debt.
Minutes of the BOJ meeting are due on Wednesday, while the head of the central bank speaks to a Japanese business lobby on Christmas Day.
ON INTERVENTION WATCH
The yen touched a fresh record trough on the euro at 184.90, and on the Swiss franc at 198.08. The dollar was up at 157.67, though investors were wary of testing the November peak of 157.90 in case that triggered intervention from Tokyo.
Japan’s chief currency official duly signalled their concern about one-way moves and warned of appropriate action against an excessive decline.
A break of 158.00 higher would target the 2025 top of 158.88, and then the 2024 high at 161.96. The dollar was otherwise steady on a basket of currencies at 98.725, having gained 0.3% on Friday.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3%, while South Korea jumped 1.8% on optimism over AI-related earnings.
Analysts at TD Securities noted equity markets recorded their highest weekly inflows on record at $98 billion last week, led by U.S. equity funds. Chinese equity funds saw their third largest weekly inflow of 2025, and emerging markets drew their largest inflows since April.
Flows to bonds, however, saw their fourth straight week of slowdown. Yields on Japanese 10-year debt rose another 2.5 basis points to the highest since 1999, while U.S. 10-year yields edged up to 4.157%.
Silver was again the star in commodities, reaching a fresh record at $67.48 per ounce and bringing gains for the year to almost 134%. Gold was up 0.6% on the day at $4,362 an ounce. [GOL/]
Oil prices gained after the U.S. intercepted a Venezuelan oil tanker over the weekend, and was pursuing another one in what would be the third such operation in less than two weeks. [O/R]
Brent firmed 0.7% to $60.88 a barrel, while U.S. crude rose 0.7% to $56.89 per barrel.
(Editing by Stephen Coates)
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