Asia Stocks Hold at Highs, Sustained by Bottomless Stimulus

Asian shares rested at record highs on Thursday as investors digested recent meaty gains, while bulls were sustained by the promise of endless free money after a benign reading on U.S. inflation and a dovish Federal Reserve outlook.

Adding to the torpor was a lack of liquidity as markets in China, Japan, South Korea and Taiwan were all on holiday.

MSCIs broadest index of AsiaPacific shares outside Japan added 0.1, having already climbed for four sessions to be up over 10 so far this year.

Japans Nikkei was shut after ending at a 30year peak on Wednesday, while Australias main index held near an 11month top.

With China off, there was little reaction to news the Biden administration will look at adding new targeted restrictions on certain sensitive technology exports to the Asian giant and would maintain tariffs for now.

Futures for the SP 500 and NASDAQ were both steady, having hit historic highs on Wednesday. EUROSTOXX 50 futures and FTSE futures barely budged.

Still, the outlook for more global stimulus got a major boost overnight from a surprisingly soft reading on core U.S. inflation, which eased to 1.4 in January.

Federal Reserve Chair Jerome Powell said he wanted to see inflation reach 2 or more before even thinking of tapering the banks supereasy policies.

Notably, Powell emphasised that once pandemic effects were stripped out, unemployment was nearer 10 than the reported 6.3 and thus a long way from full employment.

As a result, Powell called for a…

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