Tokyo, Singapore: Asian stocks rose to 3-1/2-month highs on Thursday, cheered by the Dow Jones Industrial Average breaching the 20,000-level for the first time, though concerns about US President Donald Trump's protectionist stance kept the dollar on the defensive.
MSCI's broadest index of Asia-Pacific shares outside Japan .rose 0.7 percent to its highest since Oct. 11.
South Korea's Kospi advanced 0.9 percent, Hong Kong's Hang Seng climbed 1.2 percent and Shanghai edged up 0.2 percent.
Japan's Nikkei brushed aside a stronger yen to rise 1.4 percent.
"Today's excitement mainly comes from strong US stocks overnight, but people are also positive about Japanese companies' earnings especially machinery manufacturers," said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo.
The Dow closed atop the 20,000 mark for the first time overnight as solid earnings and optimism over Trump's pro-growth initiatives revitalised a post-election rally. [.N]
Safe-haven US Treasuries were duly sold as risk aversion ebbed and the benchmark 10-year note yield rose to a four-week high on Wednesday.
Subdued investor demand at a five-year auction also hurt Treasuries.
Dollar slides
The dollar, which often draws support from higher Treasury yields, failed to follow suit. An index tracking the greenback against a basket of major currencies slid to a seven-week low of 99.793 on Thursday.
Unlike equities, the currency markets focused more on Trump's trade protectionism and the negative impact it could have on the dollar.
"The problem that the greenback is having right now is two fold — first Trump has been talking down the currency and second, his policies make foreign investors nervous," wrote Kathy Lien, managing director of FX strategy for BK Asset Management.
"Until the market comes to terms with the risk/benefits of Trump policy, the dollar may have a tough time mimicking the one way moves in stocks and bonds."
The dollar was little changed at 113.425 yen after losing 0.5 percent overnight.
It had soared to a 10-month high of 118.660 in mid-December at the apex of the dollar-boosting Trump trade, when the market focus was on bets of more fiscal stimulus and reflationary measures under the new administration.
The euro was steady at $1.0755 after gaining 0.2 percent the previous day. The common currency had risen to a 1-1/2-month high of $1.0775 on Tuesday against the struggling dollar.
The pound extended its overnight rally and touched a six-week high of $1.2648.
