Asia shares near record high on AI optimism, dollar up

Asian stocks rose on Friday as the AI ​​boom regained momentum, while the dollar held a six-week high after upbeat economic data from the US reduced bets on a rate cut.

While oil prices maintained their losses after US President Donald Trump adopted a wait-and-see stance against the unrest in Iran, having previously threatened to intervene in Iran, safe haven gold and silver also fell.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, hovering near a record high in the previous session, as stellar results from Taiwanese chipmaker TSMC breathed new life into AI trading.

The United States and Taiwan also clinched a trade deal on Thursday that lowers tariffs on the semiconductor powerhouse’s exports, directing new investment to the U.S. tech industry and risks infuriating China.

Gains in technology and financial stocks overnight pushed Wall Street higher, while Nasdaq futures rose 0.22 percent in the Asian session. S&P 500 futures are similarly at 0.15 percent.

“We know there is ongoing skepticism about capex and AI-related spending more generally, and I think yesterday’s TSMC report had a pretty solid and optimistic tone, so it certainly provided a much-needed push for the AI ​​names that have been struggling on Wall Street in recent months,” said Tony Sycamore, market analyst at IG.

“I wouldn’t say it galvanized them or fundamentally lifted them higher, but it certainly provided some much-needed reassurance that everything was going well.”

Japan’s Nikkei index fell 0.42 percent, driven by the recovery in the yen from its 18-month low.

EUROSTOXX 50 futures fell 0.38 percent, while FTSE futures lost 0.18 percent after European shares hit a record high on Thursday.

Among currencies, the dollar is hovering near a six-week high following a string of upbeat economic data from the United States, including data showing the number of Americans filing new claims for unemployment benefits fell unexpectedly last week.

The euro weakened near a 1.1/2-month low, buying US$1.1606 ($A1.7370), while sterling was down 0.06 per cent to US$1.3376 ($A2.0019).

While the dollar was at 99.36 against most currencies, it reached its highest level since December 2 with its peak of 99.493 on Thursday.

“Fixed income watchers are increasingly confident that the next benchmark decline will come from Chairman Powell’s successor in June, while growing evidence of stable operating conditions makes a cut in April less likely,” said Jose Torres, senior economist at Interactive Brokers.

According to the CME FedWatch tool, markets are pricing in the possibility that the Fed will keep interest rates steady in April, rising to 67 percent from 37 percent a month ago. The probability of a stable outcome in June also increased from 17 percent in December to 37.5 percent.

The yen gained 0.1 percent to 158.48 per dollar, but was not far off its 18-month low of 159.45 earlier in the week.

The currency sold off on the prospect of early elections in Japan early next month; investors believe this could pave the way for Prime Minister Sanae Takaichi to expand his fiscal stimulus.

“Early polling for Takaichi offers a chance for a stronger mandate at home and abroad, but failure would likely mean a swift end to his premiership,” said Daniel Hurley, portfolio analyst at T. Rowe Price.

Oil prices have begun to recover from a sharp decline in the previous session after Trump’s watered-down comments on Iran eased concerns about potential military action against Tehran and oil supply disruptions.

Brent futures were up 0.11 per cent at US$63.83 ($A95.53) per barrel, after falling more than 4.0 per cent in the previous session. US crude oil was similarly up 0.2 per cent at US$59.31 ($A88.77) a barrel, following a 4.6 per cent drop on Thursday.

Spot gold fell 0.16 per cent to US$4,607.50 ($A6,895.86) per ounce.