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Dollar on front foot in holiday-thinned trade

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Global shares set to end year on a high thanks to Wall

Street

boost

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Bitcoin stays under $100,000

By Rae Wee

SINGAPORE, Dec 26 (Reuters) - Asia shares rose slightly

in holiday-thinned trade on Thursday, extending gains from

earlier in the week with little news or data in the way to alter

their direction of travel, while the dollar was perched near a

two-year high.

As the year-end approaches, trading volumes have begun

thinning out and the main focus for investors remains that of

the Federal Reserve's rate outlook. Markets in Hong Kong,

Australia and New Zealand were closed for a holiday on Thursday.

Since Fed Chair Jerome Powell primed markets for fewer rate

cuts next year at the central bank's last policy meeting of the

year, traders are now pricing in just about 35 basis points

worth of easing for 2025.

That has in turn lifted U.S. Treasury yields and the dollar,

with the greenback's renewed strength a burden for commodities

and gold.

The benchmark 10-year yield was last steady at

4.5967%, having risen above 4.6% for the first time since May 30

earlier in the week. It is up roughly 40 basis points for the

month thus far. The two-year yield similarly firmed

at 4.3407%.

"Given December's hawkish cut, we believe the Fed will skip

at the January FOMC meeting and wait for more data before

definitely resuming, or potentially ending, this cutting cycle,"

said Tom Porcelli, chief U.S. economist at PGIM Fixed Income.

"Given the Fed's shift to less accommodation paired with

continued focus on both sides of the dual mandate, we believe

the market will have more intense emphasis on economic events in

the new year."

In currencies, the dollar was perched near a two-year high

against a basket of currencies at 108.15, and was on

track for a monthly gain of more than 2%.

The Australian and New Zealand dollars were meanwhile among

the biggest losers against a dominant greenback on Thursday,

with the Aussie falling 0.45% to $0.6241. The kiwi

slid 0.51% to $0.5650.

The euro eased 0.18% to $1.0398, while the yen

languished near a five-month low and last stood at

157.45 per dollar.

Japan's government is set to compile a record $735 billion

budget for the fiscal year starting in April due to larger

social security and debt-servicing costs, adding to the

industrial world's heaviest debt, a draft seen by Reuters

showed.

ENDING ON A HIGH

MSCI's broadest index of Asia-Pacific shares outside Japan

ticked up 0.04% and was headed for a weekly rise

of nearly 2%, taking a cue from its counterparts on Wall Street

earlier in the week.

S&P 500 futures edged 0.02% higher, while Nasdaq

futures advanced 0.13%.

EUROSTOXX 50 futures rose 0.04%.

World stocks looked set to end the year on a

high with a second consecutive annual gain of more than 17%,

unfazed by escalating geopolitical tensions and various economic

and political headwinds globally.

That is mostly thanks to a second year of huge gains for

shares on Wall Street as artificial intelligence fever and

robust economic growth sucked more global capital into U.S.

assets.

"At first glance, markets appear to suggest exceptional

exuberance that has presided over 2024," said Vishnu Varathan,

head of macro research for Asia ex-Japan at Mizuho Bank.

"Notably, U.S. bulls high on American exceptionalism have

not trampled on ebullience elsewhere."

Japan's Nikkei jumped 0.38% and was on track to end

the year with a more than 17% gain.

China's CSI300 blue-chip index fell 0.26% while

the Shanghai Composite Index lost 0.22%, though both

were headed for yearly gains of more than 10% each, helped by a

step-up in support from Chinese authorities in recent months to

shore up an ailing economy.

Elsewhere, bitcoin last traded 0.5% higher at

$98,967, having fallen from a record high above $100,000 on the

back of the Fed's hawkish repricing.

Russian companies have begun using bitcoin and other digital

currencies in international payments following legislative

changes that allowed such use in order to counter Western

sanctions, Finance Minister Anton Siluanov said on Wednesday.

In commodities, Brent crude futures rose 0.18% to

$73.71 a barrel, while U.S. crude gained 0.21% to $70.25

per barrel.

Spot gold ticked 0.5% higher to $2,626.36 an ounce.