Asian Stocks Show Record Performance, Highest in Sixteen Months

On August 1, Asian stocks hovered near a sixteen-month high, and oil held near recent highs, as investors found more reasons to be optimistic about global economic prospects than reasons to be concerned, despite data showing risks remain.

The dollar rose to a three-week high against the yen as investors sought clarification on the Bank of Japan's recent adjustment to yield curve control and what it might mean for monetary policy.

The Australian dollar fell after the Reserve Bank kept interest rates unchanged while hinting that further tightening may be required in the future.

MSCI's broadest index of Asia-Pacific shares edged slightly higher, inching back toward the high reached July 31, which was its strongest level since April of last year. Japan's Nikkei provided support, gaining 0.83 per cent on the back of a weaker yen. U.S. E-mini stock futures also pointed to a small rise after the S&P 500 ticked up 0.15 per cent overnight.

"We're in a kind of economic nirvana, with an incredibly resilient economy, solid earnings reports and cooling inflation," said Tony Sycamore, a markets analyst at IG in Sydney.

"A little more than halfway through the year, it feels like we're in a very good spot."

Oil prices were little changed on Tuesday, trading near a three-month high reached on Monday, on signs of tightening global supply as producers implement output cuts and strong demand in the world's largest fuel consumer, the United States.

Brent crude futures for October were down 0.2% or 18 cents to $85.25 per barrel. On Monday, front-month Brent settled at its highest since April 13.

The price of West Texas Intermediate crude in the United States was $81.64 per barrel, down 0.2 percent or 16 cents from the previous session's settlement, which was the highest since April 14.