By Wayne Cole
SYDNEY (Reuters) - Asian shares rose and the dollar held firm on Wednesday after Wall Street shot to record peaks amid signs of progress on U.S. tax cuts, upbeat economic data and bank-friendly comments from the would-be head of the Federal Reserve.
There was no obvious market reaction to the latest missile test by North Korea. President Donald Trump said the United States "will take care of" the North Korea issue and the approach to dealing with Pyongyang would not change.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> edged up 0.1 percent in early trade. Japan's Nikkei <.N225> added 0.5 percent, while Australia's main index <.AXJO> rose 0.7 percent.
The prospects for a U.S. tax cut seemed to improve after Senate Republicans rammed forward their bill in a partisan committee vote that set up a full vote by the Senate as soon as Thursday, although details of the measure remained unsettled.
Republican leaders conceded that they have yet to round up the votes needed for passage in the Senate, where they hold a narrow 52-48 majority.
Some analysts, however, did warn of the risks of unintended consequences if the package was passed.
"Tax cuts will mainly boost the demand side of the economy at a time when the economy has little spare capacity," said Jeremy Lawson, chief economist at Standard Life Investments.
"For that reason, the package will primarily bring forward activity with most of the stimulus eventually offset by the Federal Reserve lifting interest rates more quickly."
Fed chair nominee Jerome Powell, in his Senate confirmation hearing on Tuesday, said the case for a December rate hike was coming together, though he dodged comment on the tax proposals.
TOUGH ENOUGH
Powell also hinted at a lighter touch for bank regulation, saying current rules were already tough enough.
The S&P financial sector <.SPSY> soared 2.6 percent in reaction, its biggest daily gain since March 1.
That helped the Dow <.DJI> climb 1.09 percent, while the S&P 500 <.SPX> rose 0.99 percent and the Nasdaq <.IXIC> or 0.49 percent.
Adding to the good cheer was data showing U.S. consumer confidence surged to a near 17-year high in November, while home prices rose sharply in September, which should underpin consumer spending.
All of which helped the dollar regain some ground. Against a basket of currencies it was steady at 93.200 <.DXY> and off a two-month trough of 92.496 touched on Monday.
The dollar likewise edged up to 111.57 yen > and away from a 10-week low of 110.85, while the euro backed off to $1.1846 >.
Sterling had been the major mover, rallying on media reports Britain and the EU have reached agreement on a Brexit divorce bill that might herald a breakthrough in the talks.
The pound was last changing hands at $1.3363 >, having jumped from as low as $1.3222 on Tuesday.
In commodity markets, palladium > hit its highest since February 2001 as traders expecting higher demand from the automotive industry piled into the metal. Spot gold > was little changed at $1,293.81 an ounce
Oil eased amid uncertainty over the outcome of OPEC talks about extending price-supporting output cuts, combined with a surprise rise in crude inventories.
U.S. crude
(Editing by Sam Holmes)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
