Asia Higher as the Nikkei Jumps 7%, Trump’s Win in Focus

This morning, the Asian and Pacific Rim markets are settling down, after an up day on Wall Street. Investors are or have now digested that Donald Trump is the next US President. The Nikkei surged 7 percent at one point and the Dollar recovered its losses sending the yen lower.

There is no doubt that Trump’s win will be at the center of everyone’s minds for the immediate future but many are now doubting his bite will equal his bark. In other words he might not be as disruptive as first thought.

Japan’s benchmark, the Nikkei 225, leaped six percent to pair some gains to close at 6.72 percent. The yen weakened against the US Dollar to trade at 105.71 as of 09:00 am GMT. The USD/JPY Forex market hat plunged near ¥101 on panic trades on Wednesday.

This morning, US bond yields moved higher as traders are expecting Trump to increase fiscal spending. This has helped the US Dollar to rally against its major trading partners like the yen and euro. As always, a weaker yen propels Japanese exporting plays higher as their benchmark soared this morning.

In the Down Under, the Australian Benchmark leaped up 2.7 percent. The energy sub-sector was up over three percent and the materials sub-sector climbed over five percent. The gold sub-sector gave up yesterday’s gains to move down over five percent.

In New Zealand, the NZX 50 lost two percent at open only to close up 1.5 percent. The Reserve Bank of New Zealand (RBNZ) cut its benchmark lending rate to a record low of 1.75 percent. In a statement the RBNZ said they were cautious as “numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.”

Switching back to look at the currency and commodities universes this morning, first up is China’s yuan. The yuan has sunk to a new six year low against the almighty greenback as it is tracking a broad bond rally. Bond yields are rising on the back of that shocking win by Donald Trump.

As of 09:00 am HK time the yuan was trading at 6.8123 against the Dollar. On Wednesday, the yuan closed at 6.7769.

Looking at spot gold, this morning, the yellow metal was a big winner yesterday as investors panicked and moved into safe haven assets. This morning, gold was up 1.10 percent to$1,288.40 per ounce. Spot gold surged nearly five percent on Wednesday.