Asia Stocks Make Best Start Versus US This Century: Markets Wrap

(Bloomberg) — Asian equities advanced for a fifth day, stretching their lead over US peers this year as relatively cheaper valuations and firmer growth prospects lured buyers. Treasuries held their losses after stronger US jobs data.

The MSCI Asia Pacific Index rose 0.7% to a record. The gauge is up around 13% so far this year, its best start to the year relative to the S&P 500 this century. The US gauge is up just 1.4%. South Korea’s benchmark jumped 2.7% to extend its lead as the world’s best-performing market, with Samsung Electronics Co. among the winners.

Treasuries continued to trade lower with the yield on the benchmark 10-year at 4.17% as traders pared bets on interest-rate cuts by the Federal Reserve this year following the jobs data. Money markets priced in the Fed’s next cut in July, from June previously, after the US economy added 130,000 roles in January, twice the forecast.

In what is shaping up to be another blockbuster year, Asia’s markets are outpacing peers in the US and Europe, drawing global investors who have gradually unwound some of their dollar exposures. Investors are positioning for beneficiaries of the artificial-intelligence boom as companies channel billions of dollars into the technology, reshaping and disrupting multiple industries.

“That is what 2026 will be about: diversification across regions but also across sectors,” Elfreda Jonker, client portfolio manager at Alphinity Investment Management, said in an interview on Bloomberg Television.

Much of the focus on Wednesday was on the US jobs data, which indicated strength in the economy. The next key hurdle for markets is Friday’s inflation report, which could reinforce the case for keeping rates higher for longer if price pressures fail to ease.

The S&P 500 ended Wednesday flat after a bumpy session with real estate services stocks getting hit in the latest “AI scare trade.” The US benchmark trades at a forward price-to-earnings ratio of about 22 times, compared with about 15 times for the MSCI Asia Pacific Index.

Read: Booming Asian Markets Widen Their Lead Over US and Europe

Asia’s strength stands out when investors’ convictions in everything from tech stocks to precious metals and cryptocurrencies are being tested by shifting expectations for US interest rates and uncertainty over AI-driven disruption.

Asia is winning favor with investors as the global tech race is shifting from AI pioneers to the enablers of large-scale adoption. Regional firms control critical choke points — from advanced chips and memory to foundry services and assembly — supplying much of the hardware underpinning the AI build-out.

“We’re seeing value begin to really shift across the value chain,” Stephanie Aliaga, a global market strategist at JPMorgan Asset Management said in a Bloomberg TV interview. “That’s how markets are reacting. you see this rotation away from the biggest spenders towards the beneficiaries.”

In the currency market, the yen outperformed its Group-of-10 peers and Japan’s super-long bonds rallied as Prime Minister Sanae Takaichi’s landslide election victory eased fiscal concerns. Japan’s super-long bonds extended their post-election rally. Gold and silver edged lower, while the dollar slipped for a fifth straight session.

What Bloomberg’s Strategists Say…

The so-called quiet quitting of the US dollar came across a little louder after a blowout payrolls number for January made no sustained positive impact on the currency. The greenback will likely fall further in an extension of a trend that accelerated by concerns around Fed credibility and President Trump’s tariff threats over Greenland.

—Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.

In commodities, oil rose as tensions in the Middle East outweighed concerns that there’s a supply glut growing. Nickel extended gains after Indonesia signaled a sharp cut to output this year.

Elsewhere, the Republican-led US House passed legislation aimed at ending President Donald Trump’s tariffs on Canada, signaling a growing anxiety over the White House’s economic agenda before midterm elections focused heavily on affordability.

However, since joint resolutions must be signed by the president to become law, or passed overwhelmingly to override a veto, it’s unlikely lawmakers can force him to abandon his signature economic policy through legislation alone.

Corporate Highlights:

Cisco Systems Inc. gave a weaker-than-expected forecast for profitability in the current quarter, spurring concerns that mounting memory-chip prices are taking a toll on the company. McDonald’s Corp.’s US sales grew at the fastest pace in more than two years in the fourth quarter as value meals continued to resonate with cost-conscious diners. Grab Holdings Ltd. predicted full-year revenue that trailed estimates, a sign of strain in a Southeast Asian ride-hailing and food-delivery market pressured by weaker consumer sentiment. Apple Inc.’s long-planned upgrade to the Siri virtual assistant has run into snags during testing in recent weeks, potentially pushing back the release of several highly anticipated functions. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 12:52 p.m. Tokyo time Japan’s Topix rose 0.6% Australia’s S&P/ASX 200 rose 0.4% Hong Kong’s Hang Seng fell 0.9% The Shanghai Composite rose 0.1% Euro Stoxx 50 futures rose 0.7% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1869 The Japanese yen rose 0.5% to 152.54 per dollar The offshore yuan rose 0.2% to 6.8989 per dollar Cryptocurrencies

Bitcoin fell 0.5% to $67,442.13 Ether fell 0.2% to $1,964.85 Bonds

The yield on 10-year Treasuries was little changed at 4.17% Japan’s 10-year yield declined 4.5 basis points to 2.190% Australia’s 10-year yield advanced four basis points to 4.80% Commodities

West Texas Intermediate crude rose 0.5% to $64.94 a barrel Spot gold fell 0.5% to $5,059.11 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Paul Dobson, Winnie Hsu, Gabrielle Ng and Mia Glass.

©2026 Bloomberg L.P.