Asian shares rose today as surprisingly strong Australian jobs data raised hopes for a stronger global economic recovery and pushed the Aussie and New Zealand currencies to fresh 14-month highs, while gold hit another record.
Asian shares got an early boost after aluminium producer Alcoa kicked off the US earnings season with a surprise profit, sending its shares 6 per cent higher in after-hours trade.
An unexpected surge in Australian jobs last month and improving economic data out of South Korea added to signs that a global recovery may be accelerating.
The Aussie dollar leapt above $0.90 to its highest level since August last year as news that Australia created more than 40,000 jobs last month -- against expectations for a 10,000 decline -- fueled speculation the central bank will raise interest rates again in November after a hike earlier this week.
The euro strengthened to $1.4757 in Asia, from $1.4681 in New York.
The European Central Bank and the Bank of England are both expected to keep rates unchanged at meetings later today amid much weaker economic conditions than in Australia, but there was speculation Trichet may mention the currency.
Australian equities gained 1.6 per cent to a one-year closing high after the jobs data, outperforming a 1 per cent increase in the MSCI index of Asia Pacific stocks traded outside Japan, which briefly topped 400 points, a level it has not seen since August last year.
Japan's Nikkei index edged up 0.3 per cent, helped by gains in shipping firms after the Baltic Exchange's sea freight index hit a seven-week high yesterday, a further indication that global demand may be recovering. Mitsui OSK Lines and Nippon Yusen KK surged 5.8 per cent and 7.3 per cent respectively.
Concerns about the yen's recent strength, however, kept a lid on exporters' shares and Sony dipped 0.6 per cent.
Australia's move on Tuesday made it the first G20 nation to raise rates since the global recession began to ease and fueled market expectations that South Korea could soon follow suit.
Korean equities rose 1 per cent, helped by improving export and retail sales data
The data raised expectations that the Bank of Korea will raise rates soon to head off inflationary pressures as the economy recovers, though market watchers expect it will probably hold its fire at its monthly review tomorrow.
The Aussie dollar bolted to as high as $.9035 after the bullish jobs data, rising 1.5 per cent from yesterday's levels, before paring some of its gains.
It has been the best performer this year among the world's most traded currencies, underpinned by the resilient local economy, higher commodity prices and a pick up in investor appetite for riskier assets as the global financial crisis eased.
The New Zealand dollar also scaled fresh 14-month highs as signs Australia's economic recovery is accelerating boosted confidence in New Zealand and sparked speculation it could also raise interest rates soon.
The Kiwi dollar reached $0.7425 at one point, its highest level since late July 2008.
Reuters