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Asia follows Wall Street higher, upbeat US data lifts dollar

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Reuters TOKYO
Last Updated : Dec 28 2016 | 5:57 AM IST

By Shinichi Saoshiro

TOKYO (Reuters) - Asia stocks followed Wall Street higher early on Wednesday, while the dollar firmed against major peers such as the yen following the release of upbeat U.S. economic data overnight.

Crude oil prices held large gains on expectations of supply tightening once oil-producing nations implement a scheduled output cut.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.

Australian stocks <.AXJO> were up 0.9 percent. Japan's Nikkei <.N225> was little changed.

U.S. stocks rose slightly on Tuesday, supported by upbeat consumer and housing data, with gains in technology shares lifting the Nasdaq Composite to a record close. [.N]

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The dollar was a shade higher at 117.500 yen , having gained about 0.3 percent the previous day on data showing U.S. consumer confidence hit its highest level in more than 15 years in December, in addition to robust housing numbers.

"Until data starts to turn negative or the headlines suggest that (U.S. president-elect) Trump's stimulus programme could fall short of expectations, the dips in the dollar will be shallow with the currency aiming for new highs," wrote Kathy Lien, managing director of FX strategy for BK Asset Management.

"But at the first sign of bad news there could be massive correction in what is quickly becoming a crowded long dollar trade," Lien added.

The dollar index was 0.1 percent higher at 103.04. The euro was steady at $1.0459 and sterling was nearly flat at $1.2273 after losing 0.25 percent overnight.

The greenback was supported as U.S. Treasury yields rose on Tuesday to one-week highs in response to the strong domestic data. [US/]

The Australian and Canadian dollars also suffered losses against the greenback overnight, with the latter failing to draw support from a rally in crude oil.

In commodities, U.S. crude was a touch lower at $53.84 a barrel after an overnight gain of 1.7 percent.

Oil continued its year-end rally, albeit in thin trade, with support from expectations of tighter supply once the first output cut deal between OPEC and non-OPEC producers in 15 years takes effect on Sunday. [O/R]

(Reporting by Shinichi Saoshiro; Editing by Eric Meijer)

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First Published: Dec 28 2016 | 5:47 AM IST

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