Asian shares weathered a soft reading on Chinese manufacturing on Thursday as it only whetted expectations for more policy stimulus there, while a sharp rise in British and German bond yields rippled through global debt markets.
Among the milestones were a 15-year peak for Japan, seven years for both China and Taiwan and a near four-year top for South Korea. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.5 percent to reach ground last trod in early 2008.
The gains came despite a dip in the HSBC China manufacturing PMI to a one-year trough of 49.2 in April, when the consensus had been for it to hold steady at 49.6.
Neither was the news bright from Japan where the Markit/JMMA flash PMI fell to 49.7 in April from a final 50.3 in March.
Yet markets took it with equanimity as it added to speculation that further easing would be required from central banks in both countries.
Japan’s Nikkei .N225 was up 0.3 percent while South Korea .KS11 gained 1.4 percent. Shanghai stocks .SSEC climbed 1 percent, with investors still emboldened by a commentary in state media saying the bull market “has just begun”.
“Investors only care about the attitude of the government, which has so far appeared tolerant (of the rise),” said Du Changchun, analyst at Northeast Securities in Shanghai.
“Upward momentum is still very strong, as money keeps flooding in. I don’t dare to forecast the market’s peak.”
Wall Street had ended firmer on Wednesday as Visa’s potential expansion into China and upbeat U.S. housing data helped investors look beyond a mixed bag of quarterly earnings.
The Dow .DJI rose 0.49 percent, while the S&P 500 .SPX gained 0.51 percent and the Nasdaq .IXIC 0.42 percent.
Government bonds went the other way as UK gilts took a hammering when minutes of the Bank of England’s last policy meeting were taken as less than dovish by a crowded market.
Yields on British 10-year paper GB10YT=RR had jumped almost 15 basis points on Wednesday in the largest one-day rise since August 2013.
The selling spread to Treasuries where yields on 10-year notes US10YT=RR were up at 1.97 percent.
Sterling was a major beneficiary of the spike in UK yields, hitting its highest in over a month early on Thursday.
The pound climbed as far as $1.5080 GBP=D4, while the euro slid to 71.20 pence EURGBP=R, reaching levels not seen since mid-March. Sterling has since eased back to $1.5030, while the common currency remained pinned near the session low.
In contrast, the New Zealand dollar took a hit after a top central banker said rate cuts could be considered if domestic demand and inflationary pressures were to weaken.
The currency shed half a U.S. cent to $0.7586 NZD=D4 as Reserve Bank of New Zealand Assistant Governor John McDermott emphasised that policy needed to stay stimulative to get inflation higher.
The euro also lost ground to stand at $1.0705 EUR=, but remains stuck in the $1.0520-$1.0849 range of the past few weeks. Against the yen, the dollar was firm around 119.90 JPY= and on track for its fourth straight session of gains.
In commodity markets, spot gold XAU= was down at $1,188.61 an ounce having suffered its sharpest single-session loss since March 6 on Wednesday.
Oil prices were a fraction firmer with Brent LCOc1 quoted up 4 cents at $62.77 a barrel, while U.S. crude CLc1 added 8 cents to $56.24.