Asian stocks rose on Thursday and safe-haven government bond prices fell as crude oil prices extended gains on hopes that big producers will cap production, improving investors’ appetite for riskier assets.
Crude remained the main market driver, with oil prices up as much as 3 percent in early Asian trade following a 7 percent jump on Wednesday after Iran voiced support for a Russia-Saudi-led move to freeze production to deal with the market glut that had pushed prices to 12-year lows.
U.S. crude futures jumped $1.06 shortly after Asian markets opened, and were up 57 cents at $31.23 a barrel as of 0818 GMT.
“While there has been some confusion as to whether ‘support’ equals action, oil traders are simply relieved that the world’s fourth largest holder of oil reserves is willing to cooperate,” wrote Kathy Lien, managing director of FX strategy at BK Asset Management.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, pulling further away from a three-week low struck last week when a widespread chill in risk appetite amid euro zone banking sector concerns depressed equities globally.
Australian shares climbed 1.6 percent and South Korea’s KOSPI added 1.3 percent.
Japan’s Nikkei gained 1.9 percent, shrugging off bigger-than-expected declines in exports and imports in January.
Sentiment was also buoyed by a rise on Wall Street, where U.S. shares advanced for the third straight day as the jump in oil prices boosted energy shares. The Dow gained 1.6 percent and the S&P 500 rose 1.7 percent.
Shares also rallied in Europe overnight, where the pan-European FTSEurofirst 300 surged 2.7 percent.
In currencies, the Canadian dollar held at two-week highs, having benefited hugely from the bounce in oil, while an absence of fresh cues in minutes of the Federal Reserve’s January meeting saw the greenback shuffle in narrow range.
The Canadian dollar last traded at C$1.3677 per dollar , having risen as far as C$1.3666 – a high last seen on Feb. 4.
The Australian dollar, another commodity-linked currency, was little changed at $0.7177 after gaining 1 percent overnight.
The U.S. dollar inched up 0.2 percent to 114.29 yen. The euro was flat at $1.1123.
Minutes of the Fed’s January policy meeting showed that policymakers worried about tighter global financial conditions hitting the U.S. economy and considered changing their planned path of interest rate hikes in 2016.
“The cautious tone from the January FOMC meeting minutes highlight that the downside risks to the U.S. growth outlook had increased,” said Elias Haddad, currency strategist at Commonwealth Bank.
“We still expect the Fed to resume raising rates in June, which will continue to bode well for the USD.”
Higher equities and encouraging U.S. housing and industrial output data pushed the benchmark 10-year Treasury yield to a 9-day high of 1.8470 on Wednesday.