Asian stocks rose on Tuesday led by an outperforming tech sector following record highs on Wall Street overnight, while the dollar hovered near a six-week low to the yen as traders weighed the outlook for interest rates in the United States and Japan.

Investors were also monitoring the political turmoil in France as the government there teetered on the brink of collapse, leaving the euro languishing close to a one-week low.

The Chinese yuan was also facing its own challenges from the growing threat of more US tariffs on China, pushing it down to a 13-month trough.

Japan’s tech-heavy Nikkei jumped 1.6 per cent as of 0200 GMT, and South Korea’s KOSPI advanced 1.7 per cent. Taiwanese shares gained 1.1 per cent.

Australia’s stocks benchmark rose 0.7 per cent and reached a fresh all-time high.

However, Chinese stocks were under pressure, with Hong Kong’s Hang Seng edging slightly lower and mainland blue chips falling 0.3 per cent.

MSCI’s broadest index of Asia-Pacific shares added 0.7 per cent.

Both S&P 500 and Nasdaq futures were flat after the cash indexes renewed their record peaks on Monday, helped by strong gains for most of the so-called Magnificent 7 high-tech stocks, including a nearly 19 per cent surge for Facebook parent Meta Platforms and a 12 per cent jump for Tesla .

“Equity hedges have been unwound, which speaks to a market confident of a grind higher into year-end,” said Chris Weston, head of research at Pepperstone, referring to the bull run for US equities, and particularly the “MAG7”.

“Microsoft and Meta would be my picks that lead us higher from here.”

Microsoft advanced 7.5 per cent overnight. The other MAG7 stocks are Google parent Alphabet, Amazon, Apple and Nvidia.

In currencies, the dollar added 0.2 per cent to 149.87 yen , but remained not far from Monday’s low of 149.09, the weakest level since Oct. 21.

The dollar received some support overnight from better-than-expected US manufacturing data, which also showed a mitigation in price increases. However, the greenback came under renewed pressure as Federal Reserve Governor Christopher Waller said he is “leaning toward” a rate cut on Dec. 18.

Traders currently see about a 75 per cent chance of a quarter-point cut at this month’s Fed meeting, up from 66 per cent a day earlier and 52 per cent a week ago, according to CME’s FedWatch Tool.

The two-year US Treasury yield dipped to 4.1776 per cent on Tuesday, heading back towards the four-week low of 4.1550 per cent from Friday.

JOLTS job openings – a preferred gauge of Fed officials – is due later on Tuesday, ahead of the all-important monthly payrolls figures on Friday.

The yen, meanwhile, has been supported by rising speculation that the Bank of Japan will raise rates by a quarter point on Dec. 19, with traders currently putting the odds at around 58 per cent.

“Providing USD/JPY remains below the 151/152 resistance zone, the risks are for a deeper decline towards 145.00, which may prove too conservative if the BOJ hikes rates and the Fed cut rates,” said Tony Sycamore, an analyst at IG.

The euro eased 0.1 per cent to $US1.0488 ($A1.6261), after dropping about 0.7 per cent overnight and hitting lows of $US1.0461 ($A1.6219)25.

The French government appeared all but certain to collapse later this week after far-right and left-wing parties submitted no-confidence motions on Monday against Prime Minister Michel Barnier.

Sterling was stable at $US1.2654 ($A1.9620).

The yuan sank as low as 7.3145 per dollar in offshore trading, the weakest since November of last year.

US President-elect Donald Trump demanded at the weekend that BRICS member countries – which include China – commit to not creating a new currency or supporting another currency to replace the dollar or face 100 per cent tariffs.

Less than a week earlier, he had threatened China with an additional 10 per cent levy on top of a campaign pledge of tariffs in excess of 60 per cent on Chinese goods.

Gold remained mired around $US2,635 ($A4,085), following its retreat from an all-time peak of $US2,790.15 ($A4,326.02) on October 1.

Oil prices were steady near two-week lows. Brent crude futures eased 3 cents to $US71.80 ($A111.32) per barrel, and US West Texas Intermediate crude declined 5 cents to $US68.06 ($A105.52) per barrel.

This post was originally published on Michael West.