Shares advanced in Asia on Tuesday as the coming changing of the guard in the U.S. raised hopes for more support for the economy and more aggressive measures to fight the pandemic.
Benchmarks were higher in Tokyo, Seoul and Hong Kong but slipped in Shanghai. World markets were subdued on Monday, with U.S. exchanges closed for a holiday.
President-elect Joe Biden’s nominee for treasury secretary, former Federal Reserve chair Janet Yellen is calling on Congress to do more to fight the recession to avoid an even worse downturn.
In testimony prepared for her confirmation hearing Tuesday before the Senate Finance Committee, Yellen said more aid is needed to get coronavirus vaccines distributed — key to ending outbreaks — to reopen schools and help families struggling with job losses stay fed and housed.
U.S. markets were closed Monday for a national holiday. Analysts say attention is focused on Wednesday’s inauguration and the beginning of a new administration as President Donald Trump departs.
“The positive shift in investor optimism ahead of inauguration day is a clear signal the market is leaning towards an early stamp of approval on the Biden administration policy agenda,” Stephen Innes of Axi said in a commentary.
Hong Kong’s Hang Seng led the advance, gaining 3.2% to 29,784.44 and the Nikkei 225 in Tokyo gained 1.5% to 28,673.84. South Korea’s Kospi jumped 2.7% to 3,095.96. In Australia, the S&P/ASX 500 rose 1.2% to 6,740.60. The Shanghai Composite index was flat at 3,596.10.
Last week, Biden proposed a $1.9 trillion relief plan to provide more aid to American families, businesses and local communities and more support for vaccine production and distribution.
While Democrats have endorsed the effort, many Republican lawmakers have expressed concerns about the price tag given soaring federal budget deficits.
Yellen said that she and Biden were aware of the country’s rising debt burden, but that ultra-low interest rates make spending more now a smart choice.
The Senate Finance Committee hearing with Yellen on Tuesday is one of several that the Senate will be holding as the incoming Biden administration tries to get its top Cabinet officials in office quickly.
Adding to the sense of urgency, coronavirus outbreaks have been gaining even as states work to get COVID-19 vaccines into the arms of as many people as possible.
Coronavirus deaths are rising in nearly two-thirds of American states as a winter surge pushes the overall toll toward 400,000 amid warnings that a new, highly contagious variant is taking hold.
Stock markets got off to a slow start for the week on Monday despite news that the Chinese economy grew 2.3% in 2020 after a sharp contraction early in the year. That followed a retreat on Wall Street last week.
Treasury yields have been climbing on expectations the U.S. government will borrow much more to pay for the additional stimulus proposed by President-elect Joe Biden, in addition to improved economic growth and higher inflation. The yield on the 10-year Treasury zoomed above 1% last week for the first time since last spring and briefly topped 1.18% this week. The yield on the 10-year Treasury was 1.11% on Tuesday.
In other trading, benchmark U.S crude oil lost 1 cent to $52.41 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.20 to $52.42 per barrel on Monday.
Brent crude, the international standard, picked up 32 cents to $55.07 per barrel.
The dollar rose to 104.02 Japanese yen from 103.69 yen late Monday. The euro strengthened to $1.2095 from $1.2078.
Elaine Kurtenbach, The Associated Press