Asia Cheers China Trade Boost, Pound Rises on Brexit Breakthrough

SYDNEY (Reuters) -
An electronic board shows benchmark indexes of the global markets at the Korea Exchange in Seoul, South Korea, Friday. (AP Photo/Lee Jin-man)

Asian shares rallied for a second session on Friday as economic news from China and Japan beat all expectations, while bitcoin, the market’s new crypto-star, tumbled more than 10 percent after a meteoric ascent in recent weeks.

After an initial muted response against the dollar on the announcement of the Brexit breakthrough, sterling gradually rose, adding 0.23 percent against the U.S. currency and putting pressure on blue chips.

The fall in sterling since the June 2016 Brexit vote has given an accounting boost to UK blue chips with revenues in dollars, and a weak pound typically supports the FTSE.

Beijing reported that exports surged 12.3 percent in November from a year earlier, more than double the forecast, while imports climbed almost 18 percent.

Iron ore and copper imports enjoyed a stellar rebound, which could help stem a recent pullback in commodity prices.

Japan’s Nikkei led the way as the yen eased on the dollar, rising 1.1 percent on top of Thursday’s 1.45 percent bounce to be almost back where it started the week.

Revised data showed Japan’s economy growing twice as fast as first thought as business spending jumped.

European stock futures were up, with euro Stoxx 50 futures rising 0.6 percent in early trade.

Australian stocks put on 0.3 percent while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7 percent.

Bidders were encouraged by a steadier performance on Wall Street, where the Dow rose 0.29 percent. The S&P 500 gained 0.29 percent and the Nasdaq, 0.54 percent.

Still to come was U.S. nonfarm payrolls, with investors looking for 200,000 new jobs in November and much talk that wages might show some welcome strength.

Sterling, which briefly rose as high as $1.3521 on the Brexit accord, two cents above its low of $1.3320 on Thursday, last traded at $1.3461 , down 0.1 percent for the day.

It was one of only a few currencies to gain on the U.S. dollar, which was otherwise broadly firmer.

The U.S. currency cleared 113.00 yen to reach 113.34, while the euro touched a two-week low at $1.1763. Against a basket of currencies the dollar held firm at 93.848.

Bitcoin crested above $16,666 on the Bitstamp exchange, having doubled in value in just two weeks. But within a few hours it dropped almost 15 percent from that level to as low as 14,239 in volatile trade, intensifying the debate about whether it is a bubble about to burst. It last stood at $15,641, down 6 percent on the day.

The largest U.S. cryptocurrency exchange has been struggling to manage record traffic, with an imminent launch of the first bitcoin futures contract further fueling investor interest.

Some, however, warned the coming of futures might prove to be the downfall of the digital darling.

“Dragging bitcoin into the futures market poses a risk of big players opening doors to short-selling hell,” said Naeem Aslam, chief market analyst at Think Markets UK.

“Futures markets make it possible to short in decent size with a lot of liquidity, thus affecting the price discovery in the underlying asset market.”

The spectacular rise of the cryptocurrency has stolen some thunder from gold bulls, providing an asset that is also seen as a hedge against inflation and government interference.

Gold steadied at $1,258.10, having finally breached its recent tight trading range to hit a four-month trough at $1,245.60.

“Demand for gold relative to supply has had centuries to reach an equilibrium,” noted Alan Ruskin, a macro strategist at Deutsche Bank. “Bitcoin global demand is still finding its place relative to constrained/inelastic supply.”

Oil prices had gone the other way as a threatened strike by oil workers in Nigeria forced a bout of short covering.

Brent futures were barely changed at $62.19 a barrel, having climbed 98 cents overnight. U.S. crude was off 4 cents at $56.65.