Global investors are watching the U.S. presidential election closely for clues about the outcome.
Benchmark stock indexes in Japan and Australia were higher in early trading on Wednesday, while the dollar was higher against other major currencies.
The election results are expected to have a significant impact on economies across Asia.
It is uncertain whether the election results will be announced during the Asian trading session, as vote counting in swing states may take several days to complete.
“Although there is no clear indication of who will win the White House, the market seems to be in good mood,” said Tim Waterer, chief market analyst at investment firm KCM Trade.
In Japan, the benchmark Nikkei 225 stock index rose about 1%, while Australia’s ASX 200 gained 0.8%.
The US Dow Jones Industrial Average, S&P 500 and Nasdaq all closed more than 1% higher on Tuesday.
“However, we may still see some volatility across markets today, particularly in assets most affected by the election results, with the U.S. dollar and Chinese stocks being prime examples,” Watt said.
Donald Trump has said throughout his campaign that he would significantly increase trade tariffs, particularly with China, if he became the next U.S. president.
If Kamala Harris wins, investors expect her trade policies to continue Joe Biden’s more predictable approach.
There are other key issues for investors to focus on this week.
On Thursday, the Federal Reserve will announce its latest interest rate decision.
Central Bank Governor Jerome Powell’s comments will be closely watched around the world.
On Friday, senior Chinese officials are expected to reveal more details about Beijing’s plans to deal with a slowdown in the world’s second-largest economy.
