SYDNEY - Asian shares took a breather on Monday while Treasury yields were at 10-month highs as “trillions” in new U.S. fiscal stimulus plans were set to be unveiled this week, stoking a global reflation trade.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, having surged 5% last week to record highs. Japan’s Nikkei was closed for a holiday after closing at a 30-year high on Friday. He noted a turnaround in fortunes between the semiconductor and energy sectors highlighted Asia’s success, given the region produced around 45% of the world’s semiconductors.
At the same time, the Federal Reserve is sounding content to put the onus on fiscal policy with Vice Chair Richard Clarida saying there would be no change soon to the $120 billion of debt the Fed is buying each month. The poor payrolls report will heighten interest in U.S. data on inflation, retail sales and consumer sentiment.
The euro pulled back to $1.2185 from a recent top of $1.2349, but has support around $1.2190. The dollar also firmed to 104.08 yen from a trough of 102.57 hit last week.