A strike in Kuwait has temporarily cut the country's oil output by more than half, pulling oil prices off their lows.
Asian share markets rose on Tuesday, taking their cue from gains on Wall Street after a strike in Kuwait helped spark a recovery in crude oil prices.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5%.
Japan's Nikkei stock index was up 3.4% in early trading, a day after it plunged by that same percentage as investors assessed the impact of earthquakes in southwestern Japan's Kyushu on manufacturers' supply chains.
Brazil's Bovespa index fell 0.6% overnight as President Dilma Rousseff vowed to fight her impeachment, which could force her from office after 13 years of leftist Workers' Party rule.
Global Markets
- Nikkei jumps, shrugging off previous session loss
- Crude oil prices helped by news of Kuwait strike
- Yen surrenders gains
Brent crude was up about 0.1% at $42.97 a barrel, while US crude added 0.5% to $39.96.Beleaguered crude oil futures found a bottom after plunging as talks broke down in Doha over the weekend, where producers had hoped to curb a supply glut. A strike in Kuwait temporarily slashed the country's oil output by more than half and helped pull crude prices off their lows.
"Oil started the day sharply lower after key producers failed to reach an agreement to freeze production but the losses were short lived as reports of a strike in Kuwait sparked a U-turn that briefly took prices into positive territory," Kathy Lien, managing director at BK Asset Management in New York, said in a note to clients.
That helped commodity-linked currencies come roaring back to life after steep losses following the Doha deal breakdown.
The Australian dollar was last up 0.4% at $0.7775 after earlier rising as high as $0.7778, its highest since June. On Monday, it had skidded as low as $0.7594.
The perceived safe-haven yen slumped in line with the recovery in risk appetite. The dollar added 0.3% to 109.12 yen, while the euro added 0.3% to 123.35 yen, moving away from the previous session's three-year low.
Against the dollar, the euro edged down about 0.1% to $1.1306, as investors looked ahead to the European Central Bank's policy meeting on Thursday. While no change is expected, investors are awaiting Mario Draghi's news conference for clues on the central bank's thinking.
The US Federal Reserve will meet next week, and is also expected to hold pat on policy, though any suggestion that more hikes are on the way sooner rather than later would lift the greenback.
New York Fed President William Dudley said in a speech on Monday that economic conditions are ‘mostly favourable’ yet the central bank remains cautious in raising interest rates because threats loom.
For the second time in as many weeks, Boston Fed President Eric Rosengren warned on Monday that futures markets, which see only one modest rate hike in each of the next few years, are off the mark.
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