Asian equities saw gains almost across the board on Thursday, as bullish sentiment surrounding Chinese stocks continued to build.
Acting as a backdrop, the US dollar/yen was fast approaching the 120 yen mark, a level it had not surpassed since July 2007.
That propped up stock in Japanese car manufacturer Toyota, which ended Tokyo trading 1.8% higher.
The Nikkei-225 gained 0.94% to 17,887.21 points.
The Shanghai Stock Exchange’s composite index rose 4.31% to reach 2,899.46 points, taking the year-to-date gain to 37%, despite what technical analysts at Charles Stanley on Monday described as an “extremely overbought” market. Some observers attributed those advances to speculation that a reduction in banks’ reserve requirement ratios by the country’s central bank might be imminent.
Stoking share price gains too were an unexpected rate cut in November and the recent launch of the Hong Kong-Shanghai stock connect. Nevertheless, some analysts warned the Chinese market was becoming too frothy.
Trading volumes in Shanghai were far higher than normal, approximately 85% above their 30-day average. Brokerage stocks such as Citic Securities and China Merchants Bank each rose by over 7%.
To take note of, well-known economist Andy Xie said: “Every spike in the A share market was a bubble. Why should this one be different?” according to Bloomberg.