Asian Shares Dip Amid Holiday Trading and Dollar's Surge

Asian shares edged down in thin holiday trading, while the dollar surged alongside U.S. Treasury yields. The market focus is on the Federal Reserve's rate plans, as the year-end thinning of trade volumes occurs. The dollar's strength pressures commodities, with mixed results across global stock indices.

Asian shares eased during Thursday's holiday-thinned trade, retracing earlier gains as attention shifted back to the Federal Reserve's interest rate outlook. The dollar strengthened on rising U.S. Treasury yields, adding pressure on commodities and gold.

The Fed's recent hawkish stance led traders to anticipate limited rate cuts, lifting U.S. yields and the greenback. The dollar's firm positioning near a two-year high contrasted with losses for currencies like the Australian and New Zealand dollars. Meanwhile, Japan plans to increase government bond sales slightly next fiscal year, prompting a muted response in JGB yields.

Despite global political and economic challenges, world stocks, buoyed by the U.S. market's strong performance and interest in artificial intelligence, are poised for consecutive annual gains. Notably, Japan's Nikkei and China's indices are also set for significant yearly rises, primarily due to supportive economic measures.

(With inputs from agencies.)