TOKYO: Asia stocks rose on Thursday, tracking an overnight rally on Wall Street, while the safe-haven Japanese yen retreated as global markets regained a semblance of calm after last week's Brexit shock.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, pulling further away from a one-month low on Friday when it plunged more than 3 percent in reaction to Britain's decision to leave the European Union.
Australian stocks added 0.3 percent and Japan's Nikkei climbed 1.2 percent.
Overnight, the Dow had risen 1.6 percent while Britain's FTSE rallied for the second day, retracing all the losses suffered in reaction to Brexit.
U.S. President Barack Obama said on Wednesday he expects the world economy will be steady in the short run after Britain's decision but expressed concern about longer-term global growth.
Still, expectations that major central banks will go easier on monetary policy in anticipation of another hit to global growth due to Brexit have buoyed risk assets globally.
Analysts also saw the recent plunge in sovereign debt yields as a factor driving investors to equities.
"While the full consequences of Brexit are still uncertain, the one thing it has accomplished very successfully is dropping global bond yields to new lows and keeping global monetary policy looser for longer," wrote Angus Nicholson, market analyst at IG in Melbourne.
"Negative yielding government debt has surged.. .in such a situation, the drive for yield has never been stronger, which has seen people piling into dip-buying with little thought for the fundamental picture."
German and Japanese benchmark 10-year government debt yields have both fallen to historic lows below zero over the past week. Irish, French and Dutch 10-year yields declined to record troughs on Wednesday, all approaching zero.
The 30-year U.S. Treasury yield, while still positive, has approached record lows as well.
Bargain hunting, meanwhile, took battered currencies such as sterling off multi-decade lows. The pound was last up 0.2 percent at $1.3450
The euro, another casualty in the days after Brexit, traded at $1.1125
The safe-haven yen marched in the opposite direction as risk aversion eased. The dollar was up 0.1 percent at 102.935 yen
The Australian dollar, sensitive to shifts in risk sentiment, was steady at $0.7457
In commodities, precious metals rose in part to a weaker dollar, although the gains also highlighted underlying investor appetite for safe assets amid longer-term financial uncertainty after Brexit.
Silver rose to a 1-1/2-year high, while platinum and palladium each rallied more than 3 percent on Wednesday. Spot gold
U.S. crude was slightly lower at $49.51 a barrel
Oil has mostly recovered what it lost after the Brexit shock.- Reuters
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