HONG KONG: Asian traders stayed cautious Wednesday despite fresh records on Wall Street as Donald Trump’s tax-cut plans moved a step closer, while the pound extended gains on reports of a breakthrough in Brexit talks.
While markets were mixed, investors brushed off early worries about North Korea’s latest missile test. Bitcoin continued its surge to break the $10,000 mark for the first time.
New York traders cheered a forecast-beating US consumer confidence survey and news that a key senate committee agreed to a fiscal overhaul plan late Tuesday, fuelling a rally to new records on the city’s three main indexes.
The move allows Trump’s much-vaunted proposals to be debated on the floor of the upper chamber, a relief to many who had feared opposition from some Republicans would kill it.
The dollar rallied in US trade on the news and managed to hold its gains in Asia, buying 111.48 yen after having dipped below 111 yen at one point Tuesday. But seemingly dovish comments from Trump’s choice to head the Federal Reserve kept it from surging.
The weaker yen helped the Nikkei end 0.5 percent higher, while Sydney also added 0.5 percent. Wellington and Taipei also edged up.
Ongoing worries about China’s crackdown on risky and speculative trading dragged Hong Kong down 0.2 percent at the close but Shanghai recovered from early losses to end 0.1 percent higher.
Seoul and Singapore each dropped 0.1 percent.Analysts said there was some concern that in trying to calm surging mainland markets and stop cash leaving the country, China would try to stem the amount dealers can invest in Hong Kong.
The pound edged up after Tuesday’s rally following reports of a British-EU deal on a Brexit bill, meaning they
can now move to talks on a future trade deal.
Bitcoin, which has ploughed to continuous records in recent weeks, finally broke $10,000 Wednesday and pushed towards $11,000.
The virtual currency hit a high of $10,903 in Asia with some commentators suggesting it is being bought as an alternative, with mainstream global markets valued too high.
But there is a worry that the rise — it has surged more than tenfold since its 2017 low in mid-January — will result in a massive correction.