Dollar, Asia markets boosted as Trump pledges tax move

Hong Kong: The dollar extended a rally on Friday after Donald Trump said he would release details of a “phenomenal” tax-cut plan, sending Asian stock markets soaring on hopes it will ramp up the US economy.
Japan’s Nikkei index led the regional advance, piling on more than two per cent, as the yen sank, while a forecast-busting trade report from China also lifted spirits in Hong Kong and Shanghai.
World markets surged in the two months after Trump’s November election, buoyed by his promises to slash taxes, hike infrastructure spending and cut red tape to fan economic growth.
But the three weeks since he took office have been consumed with a series of controversial measures and outbursts on trade that had left dealers worried his domestic agenda had been put on the backburner.
The news sent a rocket through Wall Street, where all three main indexes ended at record levels, and the dollar powered higher.
On Friday, those gains continued with the greenback buying 113.75 yen, compared with 112.67 yen in New York and 112.00 yen in Asia earlier on Thursday.
It also rose against higher-yielding Asia-Pacific currencies, with South Korea’s won losing 0.4 per cent, Australia’s dollar down 0.1 per cent and the Indonesian rupiah also losing 0.1 per cent. Malaysia’s ringgit, the Singapore dollar and the New Zealand dollar were also well down. On equity markets the Nikkei ended up 2.5 per cent.
“In the end, policies pushed forward by Trump, including tax cuts and infrastructure investment, should be positive for Japanese companies,” said Nobuyuki Fujimoto, a senior market analyst at SBI Securities.
Hong Kong added 0.4 per cent in the afternoon and Shanghai closed up 0.4 per cent after news China’s exports and imports surged more than expected in January thanks to a pick-up in the world’s number two economy, improving global manufacturing and stronger commodity prices.
Sydney rallied one per cent, Seoul 0.5 per cent and Singapore put on 0.7 per cent.
Taipei, Bangkok and Jakarta were also higher.
However, while the mood is upbeat, investors are keeping a wary eye on events in Europe, where a fresh debt crisis is brewing in Greece after the International Monetary Fund warned the targets prescribed for it to qualify for European bailout cash are unrealistic.
Germany reaffirmed its opposition to cutting Athens’ debt despite the IMF asking its creditors for some kind of relief. Worries over the issue have sent Greek 10-year bond yields towards eight per cent, having sat below 6.5 per cent in November. — AFP