Sydney: Asian stocks crept to one-week highs on Wednesday as investors tried to share in the exuberance of Wall Street, where the three main indices seized record peaks for a second straight session.
Australia's main index led the early action with a rise of 0.5 per cent to a one-month top, helped by strength in bulk commodity prices.
Japan's Nikkei was closed for a holiday after enjoying a five-session winning streak that took it to the highest finish since January.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS also added 0.3 per cent, edging further away from four-month lows hit on Monday.
Emerging market shares have struggled in recent days as surging US bond yields sucked much-needed capital out of Asia. President-elect Donald Trump's past talk of trade tariffs has also weighed on sentiment in the export-intensive region.
Analysts at JPMorgan said Trump's latest pledge to dump the Trans-Pacific Partnership was already priced into markets.
"What may not be factored in is the possibility of follow-through on other, more protectionist campaign proposals," they wrote in a note to clients.
"We remain concerned about this as a source of downside risk, delivering a negative surprise to markets which so far appear to be enamored of his emphasis on fiscal stimulus and deregulation since the election."
That love-affair was evident on Wall Street where the Dow closed up 0.35 per cent and above 19,000 for the first time. The S&P 500 gained 0.22 per cent and the Nasdaq 0.33 per cent.
Still, the market is starting to look expensive with the S&P 500 trading near 17.3 times forward 12-month earnings, compared to the 10-year median of 14.7, according to StarMine data.
Yields undermine Euro
With equities in demand, US bonds were getting the cold shoulder. Two-year note yields rose as far as 1.107 per cent on Tuesday, the highest since April 2010.
Yet euro debt was thrown a lifeline by European Central Bankers who reaffirmed their commitment to super-easy monetary policy. That saw yields on German two-year paper dive to record lows around -73 basis points which in turn expanded the yield premium offered by Treasuries to an 11-year peak.
The widening spread kept the euro pinned at $1.0628 not far from last week's one-year trough at $1.0569. Against a basket of currencies, the dollar was steady at 101.00.
The dollar also kept most of its recent hefty gains on the yen at 111.00 though it has met resistance around 111.35 in the last couple of sessions.
Sterling was precariously poised at $1.2422 ahead of a budget update from British Finance Minister Philip Hammond.
Analysts expect some modest infrastructure spending and housing stimulus, but nothing that would radically change expectations of a weaker economy next year when difficult talks begin on the terms of Brexit.
Oil prices were steady for the moment as the market hung on every comment from OPEC officials on whether cartel members would agree to an output cut.
Brent crude LCOc1 was up 15 cents at $49.05 a barrel, while US crude CLc1 added 2 cents to $48.05 a barrel.
Industrial metals advanced on talk of demand from China and the whole global reflation trade. Copper hit a 16-month high, while iron ore surged anew thanks to higher steel prices.
