Asian shares hit a record high on Wednesday as investors bet on a strong economic recovery next year, as there is little sign policymakers wind back massive stimulus efforts aimed at staving off coronavirus-fuelled downturns.
MSCI's gauge of Asia-Pacific shares excluding Japan rose 0.6% to hit a record high, led by gains in Chinese shares, bringing its gains so far this year to 18.2%.
Japan's Nikkei share average lost 0.58% on its last trading day of 2020 after jumping to a 30-year high on Tuesday. For the year, it was up 15.8%.
"Investors stick to a bullish view overall and some are starting to bet further on rise in equity prices," said Masanari Takada, cross-asset strategist at Nomura Securities.
Convictions that global monetary authorities will continue to pump liquidity into the banking system to support the pandemic-stricken economy underpin risk assets.
"We think continued monetary and fiscal policy support means investors should take risk. Stocks will do better than bonds. Within bonds, corporate bonds should beat government bonds," said Hiroshi Yokotani, head of Asia-Pacific fixed-income business at State Street Global Advisors.
E-Mini futures for the S&P 500 edged up 0.13%, paring much of the losses made in the previous day after US Senate Majority Leader Mitch McConnell put off a vote on President Donald Trump's call to boost COVID-19 relief checks.
At least five Republicans have so far voiced support for the higher payments, which would require 60 votes, including the backing of a dozen Republicans.
In the currency market, the dollar dropped on the first day of trading for settlement in 2021 as traders started to dump the safe-haven US currency anew.
The euro rose 0.3% to $1.2295, after climbing overnight to a high of $1.2275, a level last seen in April 2018.
"The start of COVID‑19 immunization campaigns in several countries as well as additional US fiscal support reduce downside risk to the global economy and bode well for general financial market sentiment," analysts at Commonwealth Bank of Australia said in a note.
The Australian dollar rose 0.4% to $0.7637, just shy of a 2-1/2-year high of $0.7639, while sterling traded up 0.25% at $1.3500.
The Japanese yen also gained 0.15% to 103.36 per dollar.
The US dollar was listless against a basket of major currencies, losing 0.26% to stand at 89.769, within spitting distance from a 2-1/2-year low of 89.723.
A sluggish dollar supported gold, with bullion prices up 0.26% at $1,882.80 an ounce.
Oil prices extended gains after a rebound overnight as investors hoped that an expanded US pandemic aid stimulus would spur fuel demand and stoke economic growth.
US West Texas Intermediate crude futures were up 0.39% at $48.27 a barrel.
Treasuries were little changed after trading sideways overnight in thin trade amid the year-end holidays. US two-year yields were steady at 0.127% and benchmark 10-year yields stood at 0.9364%.