Asian shares were in a buoyant mood, with Japanese stocks charging towards a 5-1/2 year peak on Thursday after the yen fell sharply on the back of relatively positive U.S. economic data.
U.S. jobless claims unexpectedly fell last week and the November Thomson Reuters/University of Michigan consumer confidence improved from a preliminary reading, while the Chicago PMI held up better than expected last month after surging in October.
A soft October durable goods report was the only dent to an otherwise upbeat set of figures.
"The U.S. economic data were very pro-tapering, despite the weakness in the durable goods data," Steven Englander, global head of G10 FX strategy at Citigroup, wrote in a note.
Many investors expect the Fed will begin tapering in the first quarter of next year if the economy continues to improve.
"On tapering and USD, we have been struck by how much of the market continues to assign a very low probability of a December or January tapering," Englander said.
"Investors are focused on next week's labour market release, but the stronger than expected data suggests that some revision of probabilities is merited even going into the numbers."
The Nikkei is up 50 percent this year in local currency terms, outpacing a 26.7 percent jump in the U.S. S&P 500 and a 16 percent rise in the pan-European STOXX 600 index.
Investors have been using the yen as a funding currency for carry trades with the Bank of Japan committed to keeping ultra-loose monetary policy to shore up growth -- a contrast with the Fed which is moving towards a turn in policy.
Source: Reuters
