Asian shares hit a record high after Yellen calls for big spending
Asian shares climbed to a record high on Wednesday after United States (US) Treasury Secretary nominee Janet Yellen advocated for a hefty fiscal relief package to help the world’s largest economy ride out a pandemic-driven slump.
At her confirmation hearing on Tuesday, she said the benefits of a big stimulus package are greater than the expenses of a higher debt burden.
US President-elect Joe Biden, who will be sworn into office on Wednesday, last week laid out a $1.9 trillion stimulus package proposal to boost the economy and speed up the distribution of vaccines.
“There will be a large-scale fiscal spending. The Fed is seeking to achieve two percent inflation and full employment, which still look distant, so it will keep interest rates low for some time and market sentiment should remain robust,” said Yoshinori Shigemi, macro strategist at Fidelity International.
MSCI’s Asia-Pacific index outside Japan rose 0.81%, reaching its highest level ever.
Hong Kong’s Hang Seng rose 1.0% to edge near its 2019 peak while Australian shares added 0.4%, reaching a record high. Japan’s Nikkei, however, slipped 0.45% on profit-taking.
European stocks are seen mixed, with euro stoxx 50 futures flat and Britain’s FTSE futures up 0.3%.