Asian shares shrugged off early losses on Wednesday, while the dollar was close to 14-month highs against a basket of major currencies after data underscored that the U.S. economy continues to gather gradual momentum.
The Institute for Supply Management said its U.S. manufacturing activity index rose to 59.0 in August, the strongest since March 2011. July construction spending was at its highest level in over 5-1/2 years. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4 percent. It opened lower after Wall Street marked a mixed day, though the upbeat U.S. economic data underpinned shares and limited losses.
Japan’s Nikkei stock average rose 0.8 percent to a seven-month high, riding the weaker yen. Hopes that Prime Minister Shinzo Abe’s cabinet reshuffle will give fresh momentum to his growth-oriented policies also lifted sentiment. “I guess U.S. shares did not benefit much from the data because it could mean an earlier rate hike but for Japanese exporters, signs of a strong U.S. economy is positive,” said Soichiro Monji, chief strategist at Daiwa SB Investments.