Asian Markets Rise on Vaccine Hopes and Joe Biden’s Pick on Yellen for Treasury Secretary
Stocks in Japan led gains among Asia-Pacific markets in Tuesday trade as investors in the region react to more positive coronavirus vaccine news, as well as U.S. President-elect Joe Biden’s choice of former Federal Reserve Chair Janet Yellen as Treasury secretary.
In afternoon trade, the Nikkei 225 jumped 2.75% while the Topix index advanced 2.28%. Markets in Japan were closed on Monday for a holiday.
South Korea’s Kospi rose 0.54%, while in Australia, the S&P/ASX 200 gained 1.5%.
Mainland Chinese markets, on the other hand, were lower by the afternoon: the Shanghai composite dipped fractionally while the Shenzhen component declined 0.169%. Hong Kong’s Hang Seng index was slightly higher.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.31%.
Investors continued to monitor positive momentum surrounding the race for a coronavirus vaccine. AstraZeneca said Monday interim analysis showed its coronavirus vaccine has an average efficacy of 70% in protecting against the virus.
That follows other encouraging vaccine results in recent weeks, with late-stage trial readouts from Pfizer-BioNTech and Moderna showing their respective Covid-19 vaccine candidates were about 95% effective.
News that Biden has picked former U.S. Fed Chair Yellen to be Treasury secretary may also have buoyed investor sentiment on Tuesday. If confirmed by the Senate, she is set to be the first woman to lead the department.
“A strong spirit of cooperation between the Fed and Treasury is one thing of which we can now be assured,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, wrote in a note.
″(Yellen’s) a known commodity,” Jeffrey Kleintop, chief global investment strategist at Charles Schwab, told CNBC’s “Squawk Box Asia” on Tuesday.
“How she chooses … to communicate … is well-known within the market so there won’t be any miscommunication,” Kleintop said. “So, seems like a good choice all around from a market perspective.”
Meanwhile, the Trump administration has begun the transition process to President-elect Biden, making federal resources available for his transition into office.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.478 following an earlier spike from levels below 92.4.
The Japanese yen traded at 104.56 per dollar after seeing levels below 104 against the greenback yesterday. The Australian dollar was at $0.7312 following an earlier low of $0.7281.
Oil prices were higher in the afternoon of Asia trading hours, with international benchmark Brent crude futures up 0.87% to $46.46 per barrel. U.S. crude futures were 1% higher at $43.49 per barrel.