Asia report: Most markets rise, Japan retail sales improve

Australian shares meanwhile reached nearly two-year highs.

“The period between Christmas and New Year's is not typically known for a significant influx of market-moving news; however, the Treasury rally on Wednesday, supported by the success of the five-year stop-through, carried notable weight and saw 10-years richer by almost 10 basis points, with yields slipping below 3.80%, the lowest since July,” said SPI Asset Management managing partner Stephen Innes.

“The recent surge in buying activity in stocks and bonds is primarily linked to the widespread anticipation of lower yields in 2024, propelled by the expected rate cuts from the Federal Reserve.

“However, a significant unresolved aspect is the market's pricing of these rate cuts, which appears notably more aggressive than indicated in the December dot plot.”

Innes said that while flashes of uncertainty and indecision dotted the New York session, the fall in US yields could give investors more confidence to hold the bullish course through year-end.

“Still, it will most certainly hold the short sellers at bay, who remain frustrated to the nth degree.

“If nothing else, after the tumultuous year we have gone through, especially in the rates markets, it's astonishing that 10-year yields are trading nearly on top of the 2022 closing levels.”

Most markets rise, Japan a notable exception

In Japan, the Nikkei 225 index fell by 0.42% to close at 33,539.62, and the Topix index slipped by 0.14% to reach 2,362.02.

The declines on Tokyo’s benchmark were led by Trend Micro, down 6.18%; Kawasaki Kisen Kaisha, off 3.92%; and Nippon Yusen, which lost 3.46%.

Mainland China’s markets showed strength as the Shanghai Composite added 1.38% to reach 2,954.70, and the Shenzhen Component saw even more significant gains, rising by 2.71% to close at 9,441.06.

Leading the rally in Shanghai were Cybrid Technologies and Cashway Technology, with gains of 10.04% and 10.03%, respectively.

Hong Kong's Hang Seng Index saw a substantial increase of 2.52%, closing at 17,043.53.

Prominent gainers in the special administrative region included Country Garden Services, up 7.41%; Zhongsheng Group, ahead 7.34%; and Geely Automobile, which was 6.69% firmer.

The Kospi index in South Korea recorded a 1.6% gain, closing at 2,655.28, with noteworthy performers including a 7.05% rise for EcoPro Materials, and Celltrion with a 6.16% improvement.

Australian shares continued their positive momentum, with the S&P/ASX 200 index rising by 0.7% to close at 7,614.30.

Leading the upward trend in Sydney was Mercury NZ, up 4.36%; and Meridian Energy, rising 4.21%.

New Zealand's S&P/NZX 50 index also performed well, registering a gain of 0.77% and closing at 11,768.68.

The gains in Wellington were led by Pacific Edge and Restaurant Brands New Zealand, with rises of 12.5% and 5.28%, respectively.

In currency markets, the dollar was last down 0.8% on the yen, trading at JPY 140.69, while it increased 0.12% against the Aussie, reaching AUD 1.4623.

The greenback was relatively stable against the Kiwi, with a minor decline of 0.01%, changing hands at NZD 1.5770.

As for oil prices, Brent crude futures were last down 1.13% on ICE at $78.75 per barrel, while the NYMEX quote for West Texas Intermediate dropped 1.24% to $73.19.

Retail sales rise in Japan in November

According to official government data, Japan's retail sales experienced a notable uptick in November, registering a 5.3% increase.

The performance surpassed the expectations of a Reuters poll, which had predicted a more modest growth rate of 5%.

Notably, November's figures outpaced the retail sales growth recorded in October, which stood at 4.2%.

However, November's growth rate was noticeably lower when compared to the peak monthly growth of 7.2% seen in March earlier in the year.

Reporting by Josh White for Sharecast.com.