By Rae Wee
SINGAPORE, Dec 23 (Reuters) – Asia shares rose alongside precious metals on Tuesday as momentum buying from investors extended ahead of the festive holidays, with an advanced reading on U.S. GDP expected later in the day.
The fragile yen found a floor as traders stayed alert to any signs of intervention from Japanese authorities to stem the currency’s slide, which has picked up pace in the wake of a well-telegraphed Bank of Japan (BOJ) rate hike on Friday.
Despite it being a holiday-shortened week for much of the world, investors will have the chance to catch up on a slew of U.S. economic releases in the coming days, which had been delayed by a record government shutdown last month.
Tuesday’s key data point will be on third-quarter growth figures, which are forecast to show the U.S. economy had continued to grow strongly.
Expectations are for annualised growth to come in at 3.3%, a slight pullback from the previous quarter due in part to a sharp pullback in imports after a run-up earlier in the year ahead of the introduction of tariffs.
“Looking ahead, underlying growth is likely to slow down in Q4 given the lengthy government shutdown and the potential for a further headwind from auto sales,” said David Doyle, head of economics at Macquarie Group.
Still, the market mood remained buoyant ahead of the outcome and MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.31% in early trade, while Tokyo’s Nikkei tacked on 0.1%.
S&P 500 futures were little changed while Nasdaq futures added 0.11%.
Overnight, shares of Nvidia rose after Reuters reported the company told Chinese clients it aims to start shipping its second-most powerful AI chips to China before the Lunar New Year holiday in mid-February next year.
U.S.-listed shares of Novo Nordisk jumped 6% in extended trading after the U.S. Food and Drug Administration approved its weight-loss pill on Monday, giving the Danish drugmaker a leg up in the race to market a potent oral medication for shedding pounds.
“Risk-on sentiment is dominating Wall Street to begin the week of Christmas, with investors raising equity and commodity exposures as we approach year-end,” said Jose Torres, senior economist at Interactive Brokers.
“For now, traders are taking their cue from the general sense amongst participants that there’s little standing in the way for a Santa Claus rally to manifest.”
In precious metals, spot gold and spot silver vaulted to all-time highs, driven in part by safe-haven demand from escalating geopolitical tensions as the U.S. tried seizing more tankers carrying Venezuelan oil. [GOL/]
Oil prices eased a touch, having risen on Monday on worries about supply disruption.
Brent crude futures edged 0.06% lower to $62.03 a barrel, while U.S. crude fell 0.16% to $57.92 per barrel. [O/R]
INTERVENTION THREATS KEEP YEN IN CHECK
Over in the foreign exchange market, the yen remained the focal point as investors weighed the odds of an imminent intervention from Japanese authorities to shore up the currency.
It was 0.3% stronger at 156.57 per dollar in early trade.
Finance Minister Satsuki Katayama told Bloomberg News in an interview on Monday that Japan has a free hand in dealing with excessive moves in the yen, in her strongest warning yet against the currency’s weakness.
While the BOJ raised rates at the conclusion of its December policy meeting on Friday, the move was widely expected and Governor Kazuo Ueda offered few hints on the extent of future rate hikes.
“Their message is so underwhelming… you hike, but you need to hike with conviction. They didn’t hike with conviction,” said Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis.
Against the euro and the Swiss franc, the yen was similarly pinned near a record low.
In other currencies, the dollar was on the back foot, with the euro up 0.12% at $1.1772, while sterling rose 0.16% to $1.3482.
(Reporting by Rae WeeEditing by Shri Navaratnam)
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