*

Japanese stocks, yen extend gains after Takaichi's

election

victory

*

S&P 500 e-mini futures show signs of exhaustion after

rally

*

White House primes markets for lower jobs growth

*

(Updates with early European trading)

By Alun John and Gregor Stuart Hunter

LONDON/SINGAPORE, Feb 10 (Reuters) - World shares were

back at record highs on Tuesday, led by an extended rally in

Japan after Prime Minister Sanae Takaichi's decisive weekend

election victory, with investors also looking ahead to a busy

few days for U.S. economic data.

The Nikkei 225 jumped 2.3%, rising for a third

consecutive day to a fresh peak. ‌Asia-Pacific shares outside

Japan rose 0.6%, and with European shares just

about in positive territory as investors digested a

raft of earnings, the MSCI All-Country World Index rose 0.2% to

a fresh record.

Japanese stocks had been expected ​to benefit from a Takaichi

victory given her plans for fiscal stimulus, but, more

surprisingly, Japanese government bonds and the yen, which had

been expected to ‍suffer, have rallied this week, seemingly on

hopes that political stability and the stimulus will boost

growth and drive investor ⁠optimism.

The most dramatic moves are still ⁠in equities, however, and

the Nikkei is up 12% so far this year, also supported by a

global tech rally that has boosted semiconductor and artificial

intelligence-linked shares.

While tech stocks around the world, especially ‌software

names, sold off last week on fears they could be upended by

artificial intelligence ​tools, they have since found something

of a footing. The Nasdaq Composite gained 0.9% on

Monday.

"We're believers in (the tech rally)," said Mike Kelly,

global head of multi-asset at PineBridge Investments.

"You want to go with the new disruptive technology that's

working its way through the ⁠economy and you also want to be with

the winners as opposed to ‍the losers. But ​it's not obvious who

those are. A year ago, who would have thought software would be

hit?"

"It's going to be a bumpy ride because it's a disruptive

technology, but you want to get on this bucking bronco and not

let go."

Google-owner Alphabet raised $20 billion on Monday

with a ‍bond offering, and has also begun marketing sterling and

Swiss franc tranches.

IMPORTANT DATA

Several critical U.S. economic reports will be released this

week including delayed retail sales data for December, due later

in the day, as well as payrolls data for January, delayed from

last week, and inflation data.

White House economic adviser Kevin Hassett said on Monday

job gains could be lower in the coming months as the Trump

administration's immigration policies slow labour growth and new

AI tools boost productivity.

While that seemed to be a comment on the general trend, it

will mean Wednesday's jobs data will be especially closely

watched.

Lower employment would make it easier for ​the Federal

Reserve to ‍cut rates, weighing on the dollar.

The U.S. currency was broadly steady against most peers on

Tuesday, apart from the yen, against which it fell 0.4% to 155.3

yen.

The U.S. dollar index, which measures its strength

against a basket of six currencies, was down 0.1%, still

wallowing ​near its lowest levels of the month at 96.86.

The index logged its biggest one-day drop in two weeks on

Monday, following a Bloomberg News report that Chinese

regulators had advised financial institutions to curb holdings

of U.S. Treasury bonds due to concern over concentration risk

and market volatility.

Treasury Secretary Scott Bessent said on Monday that senior U.S.

Treasury staff visited China last week "to strengthen channels

of communication".

The yield on the U.S. 10-year Treasury bond was last down 1

basis point at 4.184%.

Market pricing continues to indicate that the Federal

Reserve will remain on hold until June.

Other areas of recent market stress were calmer on Tuesday.

British government bonds slightly outperformed peers having lost

ground on Monday as Prime Minister Keir ​Starmer came under

increasing pressure.

Indonesian markets remained composed throughout trading

in Jakarta, rising 1% and largely unswayed by FTSE Russell's

decision to postpone a scheduled index review. Last month,

larger rival MSCI ( MSCI ) warned that Indonesia was at risk of

a downgrade to frontier status over data transparency issues.

In commodities markets, Brent crude was last a

fraction lower at $68.90.

Gold fell 0.5% to $5,043 per ounce, while silver

was down 1.6% ‍at $81.90 per ounce.