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Asian stocks resumed their ascent on Friday, supported by US earnings optimism and a rise in oil prices while the euro edged higher as the European Central Bank signaled an end to its massive stimulus.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, following two straight sessions of decline. Japan’s Nikkei dipped 0.1 percent.

China’s custom-cleared trade data showed brisk growth in exports and imports in 2017, underscoring a global economy that continues to hum along nicely, Reuters reports.

Wall Street’s three major stock indexes hit record highs with earnings for S&P 500 companies expected to have increased by 11.8 percent in the recently-ended quarter, according to Thomson Reuters I/B/E/S.

MSCI’s broadest gauge of the world’s stock markets also hit a record high on Thursday, having risen in seven of the eight business days so far this year for a total increase of 3.3 percent.

The energy sector led the gains as oil prices rose to three-year highs while interest rate sensitive-sectors, such as utilities and real estate companies, underperformed.

US Treasury yields fell on Thursday after China disputed a media report that its government officials had recommended the country slow or halt its purchases of US bonds.

China’s currency regulator dismissed the report but said it is diversifying its foreign exchange reserves in order to safeguard their value.

 

“China is starting to rebuild its forex reserves so it does not make sense economically that China would want to stop buying US Treasuries,” said Shuji Shirota, head of macro-economics strategy group at HSBC in Tokyo.

The 10-year Treasuries yield stood at 2.550 percent, off Wednesday’s ten-month high of 2.597 percent.

On the other hand, the benchmark German 10-year Bunds yield hit a five-month high of 0.532 percent after accounts of the ECB’s December meeting showed it thinks it should revisit its communication stance in early 2018.

 

With the euro zone seeing its best growth in a decade, the ECB should gradually shift its stance to avoid a more disruptive move later and look at a broader revision of its policy guidance to reduce the focus on bond purchases and raise the emphasis on interest rates, they showed.



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