Stock markets in Asia edged higher, the dollar rose against major currencies and U.S. treasury yields climbed as investors positioned themselves for a possible victory by former President Donald J. Trump.
The results are not settled and the markets continue to teeter back and forth, but traders were already reacting to the positive early returns for Mr. Trump in key battleground states during Asian trading hours.
Stocks and government bond yields nudged higher while Bitcoin surged to record highs in Wednesday trading in Asia — moves that have all been associated with the possibility of economic stimulus under a Trump administration.
The U.S. dollar rose against the Japanese yen, as well as the Mexican peso and Chinese yuan — the currencies of two major trading partners expected to be heavily affected by Mr. Trump’s proposal to raise tariffs.
U.S. stock futures were more than 1 percent higher.
Andrew Brenner, head of international fixed income at National Alliance Securities, said that the early market reaction appeared to favor Trump. “But it’s not over,” he said. “We’ll see.”
In October, investors started driving up U.S. Treasury yields and pushing the dollar higher against global currencies as they started to see a better chance of a Republican victory.
This was caused in part by the expectation that Mr. Trump’s proposed policies on taxes, trade and immigration may boost growth at the same time as dramatically increasing government spending. Together, analysts believe, they would drive interest rates higher over time.
But in the last week, as the odds in betting markets started to veer slightly from Mr. Trump, some of those trades pulled back. A victory for Vice President Kamala Harris has been seen as likely to continue policy when the economy is growing and the Fed is cutting interest rates, which also tends to stimulate the economy and support stock prices.
In a sign of the initial market reaction favoring Ms. Harris’s opponent, the 10-year U.S. Treasury yield rose by more than 0.1 percentage point to over 4.4 percent on Wednesday morning.
An index measuring the value of the dollar against several other major currencies rose 1.4 percent. In one of the closely watched currencies, the Japanese yen weakened 1.4 percent to 153.69 per dollar.
Across the region, stock markets extended gains from Tuesday. Japan’s benchmark Nikkei 225 rose 2.3 percent. The Shanghai Stock Exchange was up and down, and Hong Kong’s Hang Seng Index was down 2. percent.
Bruce Pang, chief economist for the greater China area at JLL, a real estate and investment management firm, said the Hong Kong stocks are down, because the companies listed there are more exposed to a weaker Chinese currency.
Mr. Trump’s more protectionist policies might also mean that Chinese policymakers will focus more on driving domestic demand in the economy instead of expecting exports to stimulate growth. The markets will be watching even more closely if Beijing announces additional stimulus measures after a key policy meeting this week.
For Chinese investors, Mr. Pang said, a victory for the former president may mean fewer uncertainties than a victory for Ms. Harris or even the first Trump presidency.
“There will be tensions geopolitically, but it’s still more predictable,” he said. “There is some history there.”
In the volatile cryptocurrency markets, Bitcoin rose 9 percent in the last 24 hours to nearly $75,000, eclipsing a record high set in March. Mr. Trump had been promoting himself as a crypto supporter on the campaign trail, fueling hopes that a Republican victory would propel digital currency prices higher.
Over the last few months, cryptocurrency prices have tended to rise and fall with the perception of Mr. Trump’s prospects. Bitcoin prices reached a near record high last month as online bettors seemed to favor his chances of winning, but dipped in the last week.
No stock is more directly linked to Mr. Trump’s political fate than Trump Media & Technology Group, the parent company of Truth Social. Mr. Trump is the social network’s most important user and largest shareholder, and the company’s shares have traded largely as a proxy for Mr. Trump’s political fortunes.
Trump Media’s stock price swung wildly in after hours trading. At one point, it was up 25 percent from its close on Tuesday, but pulled back to a 10 percent gain.
The post Stocks Rise as Trump Has Strong Showing in Swing States appeared first on New York Times.
