Asian shares edge up, Nikkei snaps 16-day winning streak

TOKYO: Asian shares edged higher yesterday, while US Treasury yields and the dollar got a lift following a report that Republican senators were leaning towards John Taylor to be the next Federal Reserve chief.

European stock futures were down 0.2 per cent, pointing to a weaker start, while Dax futures also shed 0.2 per cent and CAC 40 futures were slightly lower.

MSCI’s broadest index of AsiaPacific shares outside Japan shrugged off early sluggishness and was up 0.1 per cent.

But Japan’s Nikkei stock index erased gains and finished down 0.5 per cent, snapping a record 16 straight session of gains that had continued after the victory of Prime Minister Shinzo Abe’s coalition in Sunday’s election raised investors’ hopes that his policies would keep the yen weak.

Despite Wednesday’s share weakness, Abe’s victory should reassure overseas investors who had been concerned about policy continuity, and therefore “new money should come into the Tokyo market,” said Akio Yoshino, chief economist at Amundi Japan Ltd.

“The strength of corporate earnings should continue to support the Tokyo equity market” in the coming weeks, Yoshino said.

China’s blue-chip CSI300 index rose 0.3 per cent, while the Shanghai Composite Index gained 0.2 per cent.

China’s ruling Communist Party revealed its new leadership line-up on Wednesday when President Xi Jinping introduced his Politburo Standing Committee, culminating a week- long party congress. The line-up broke with recent precedent by failing to include a clear successor to the president among the seven-man line-up.

On Tuesday, US President Donald Trump used a luncheon with Senate Republicans to get their views on who he should tap to be the next leader of the Federal Reserve, according to senators who attended.

A source familiar with the matter said Trump polled the Republicans on whether they would prefer Stanford University economist John Taylor or current Fed Governor Jerome Powell for the job, and more senators preferred Taylor.

Taylor is seen as someone who may put the central bank on a faster path of interest rate increases.

That helped send US benchmark 10- year Treasury note yields to their highest since March.

The 10-year yield stood at 2.419 per cent in Asian trade, up from its US close of 2.406 per cent on Tuesday, when it rose as high as 2.428 per cent. — Reuters