Asian stocks rose to two-week highs on Tuesday, buoyed by progress in U.S. debt ceiling negotiations and resilient economic data from Japan. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, while Japan’s Nikkei extended its winning streak into a ninth session and rose 0.6%.
President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement Monday on how to raise the U.S. government’s $31.4 trillion debt ceiling, but vowed to keep talking. This spurred some hopes despite distinct risks of brinkmanship and blame-shifting remaining on the cards.
Japan’s manufacturing activity expanded for the first time in seven months in May, survey data showed, while the service-sector hit record growth, as the post-COVID recovery gains traction. Purchasing Managers Index surveys are due in Europe, Britain and the United States later in the day and strong services growth is expected to hold the composite readings in expansionary territory.
The U.S. dollar tracked the move and hit a six-month high of 138.88 yen in the Asia session. Benchmark Brent crude futures rose 0.4% to $76.26 a barrel, while spot gold fell 0.4% to $1,960 an ounce. Overnight the S&P 500 was flat.