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Japan’s Nikkei nears record peak after Nvidia beat, rest of Asia muted

 – Japan’s Nikkei share average climbed to the cusp of an all-time peak on Thursday after unexpectedly strong revenue forecasts from US chip designer Nvidia lifted Asian tech stocks.

However, the regional mood was tempered by a retreat in Chinese stocks from multi-month highs reached amid Beijing’s efforts to boost market confidence.

Long-term US bond yields hugged three-month highs while the dollar sagged after minutes from the last Federal Open Market Committee meeting confirmed the view that interest rate cuts would be slow in coming, but weren’t markedly more hawkish that the Fed’s previously expressed views.

The Nikkei 225 share average pushed as high as 38,924.88 for the first time since January 1990 – right when the so-called bubble economy peaked – before entering the midday recess up 1.7% from Wednesday at 38,913.84. Its all-time high is 38,957.44 set on Dec. 29, 1989.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.07%, with a 0.71% rise for Taiwan’s stock benchmark countered by losses in Hong Kong.

The Hang Seng slipped 0.41%, threatening to snap a seven-day winning streak. A subindex of tech shares slumped 0.84%.

Mainland blue chips oscillated throughout the session between small gains and losses.

Meanwhile, US stock index futures signaled gains, following a mixed session on Wednesday for the main benchmarks. S&P 500 futures EScv1 rallied 0.75% and tech-focused Nasdaq futures NQc1 jumped 1.39%.

Following the closing bell overnight, Nvidia forecast a roughly 233% surge in quarterly revenue, sending its shares up some 10% after-hours.

The Nikkei has jumped about 16% already this year, with the S&P 500 and Nasdaq rallying some 5% each, driven in large part by mammoth expectations for artificial intelligence (AI), with Nvidia’s chips at the center of that boom.

“Nvidia’s earnings beat boosted sentiment and eased concerns over stretched valuations, providing room for the AI theme to continue to drive markets,” Saxo Markets analysts wrote in a research note.

The 10-year US Treasury yield eased slightly in Asian time on Thursday to 4.3068%, close to the 4.332% level marked a week ago and which had not been seen since the end of November.

The bulk of policymakers at the US Federal Reserve’s last meeting in January were concerned about the risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level, minutes released on Wednesday showed.

That reinforced the view among traders that any rate cut is not imminent, with market pricing suggesting one-in-three odds for a first reduction in May, according to CME Group’s FedWatch Tool.

The dollar continued to retreat from a three-month high reached last week, when the US dollar index =USD, which tracks the currency against six major peers, reached 104.97. It was flat at 103.99 in early trading on Thursday.

The euro EUR=EBS was little changed at $1.08195, while the yen JPY=EBS was steady at 150.345 per dollar.

Elsewhere, oil prices rose slightly, adding to gains from the previous session that came amid signs of tighter supply. O/R

US West Texas Intermediate crude futures (WTI) CLc1 rose 17 cents to $78.08 a barrel for the prompt month. The May contract gained 14 cents to $77.45 a barrel by 0150 GMT.

Brent crude LCOc1 for April delivery ticked up 14 cents to $83.17 a barrel, while the May contract added 13 cents to $82.24 a barrel.

Oil prices rose 1% on Wednesday, with refinery restarts in the United States supporting demand after a series of outages earlier cut US refinery utilization rates to the lowest level in two years. – Reuters

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