Asian stocks stay near decade highs on buoyant Wall Street

Asian stocks stayed closed to a decade-long peak on Thursday following another record-breaking day on Wall Street, though Japan's Nikkei slid back from a 26-year high in volatile trading, hit by profit-taking.

The dollar slipped amid uncertainty over the fate of the US tax reform plans, while the New Zealand dollar rallied as hawkish-sounding statements by the country's central bank boosted the recently-battered currency.

Spreadbetters expected Britain's FTSE to open 0.2 per cent lower, Germany's DAX to open down 0.03 per cent and a flat start for France's CAC.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent and in close reach of a 10-year high set the previous day, taking cues from overnight Wall Street gains.

Australian shares rose 0.55 per cent and to their highest level since January 2008. South Korea's KOSPI, which had a succession of record highs in past weeks, handed back earlier gains and was flat. Shanghai dipped 0.1 per cent and Hong Kong's Hang Seng climbed 0.6 per cent.

Japan's Nikkei initially surged 2 per cent to reach a high not seen since January 1992 but reversed course and ended the day down 0.2 per cent.

“There were no news that drove the Nikkei lower. The market was looking increasingly lofty after surging in the morning and sellers emerged in the futures, which spilled over into the cash market,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

“The market was beginning to look very rich and there were profits to be locked in.”

Kiwi rallies

Among currencies, the New Zealand dollar was a big mover, surging about 1 per cent to a two-week high of $0.6974 before last trading at $0.6956.

The kiwi flew after the Reserve Bank of New Zealand (RBNZ) said early on Thursday that added fiscal stimulus and a lower local dollar would lead to faster inflation and likely an earlier rise in interest rates.

On Thursday, the central bank held rates steady at 1.75 per cent, as widely expected. In late October, the New Zealand dollar sunk to a five-month low of $0.6818 as a change in government unsettled investors.

The dollar index against a basket of six major currencies was 0.1 per cent lower at 94.789, staying below a three-month high of 95.150 set in late October.

It had reached that peak on hopes for enactment of US tax reforms. But recent uncertainty over the fate of the tax plans has weighed on the dollar.

US Senate tax-cut bill

A US Senate tax-cut Bill, differing from one already in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican tax overhaul push and increasing scepticism on Wall Street about the effort.

“There's very much a risk of disappointment. The US dollar could go through a weakening phase on the back of uncertainty around that tax reform,” said Steven Dooley, currency strategist for Western Union Business Solutions in Melbourne.

The greenback slipped 0.2 per cent to 113.640 yen. The euro gained 0.1 per cent to $1.1604 after touching a 3-1/2-month low of $1.1553 at the week's start.

US crude oil futures was nearly flat at $56.82 a barrel. Government data showing a rise in domestic crude production had weighed on oil overnight but rising tensions in West Asia limited the losses.

US crude rose to $57.92 on Wednesday, highest since July 2015, as tension flared between Saudi Arabia and Iran, while the Saudi crown prince tightened his grip on power.

Spot gold added 0.2 per cent to $1,283.45 an ounce. The precious metal had risen to a three-week high of $1,287.13 an ounce the previous day as a potential delay in the US tax reform plan was seen moderating the Federal Reserve's interest rate hikes next year and support non-yielding gold.

Palladium was 0.1 per cent higher at $1,014.25 an ounce. The metal used for auto catalysts has rallied on an expected supply deficit and higher demand in the car market, reaching a 16-year high of $1,019 on Wednesday.