TOKYO: U.S. stocks jumped and the U.S. dollar and the Mexican peso soared early on Monday after the FBI said it stood by its earlier recommendation that no criminal charges were warranted against Democrat Hillary Clinton.
The news boosted U.S. S&P 500 Index futures 1.2 percent, a gain that is likely to snap the nine-day losing streak in the U.S. stock index - its longest in more than 35 years.
Investors had been unnerved by signs of a tightening presidential race between Democrat Hillary Clinton and Republican Donald Trump, whose stance on foreign policy, trade and immigration has rippled through financial markets.
Clinton is seen as a candidate of the status quo and her policies are viewed as more predictable than her Republican rival, a political novice.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent as Australian shares gained 0.7 percent. Japan's Nikkei looks set to gain 1.5 percent based on Chicago-traded futures.
The FBI said on Sunday it stood by its earlier finding that no criminal charges were warranted against Clinton for using a private email server for government work, lifting a cloud over her presidential campaign two days before the U.S. election.
FBI Director James Comey made the announcement in a letter to Congress, saying the agency had worked "around the clock" to complete its review of newly discovered emails and found no reason to change its July finding.
The review of the emails had rattled financial markets and so the latest news triggered a relief rally.
In the currency market, the dollar rose as much as 1.4 percent against the yen and last stood at 103.96 yen, up 0.8 percent from late U.S. levels while the euro dropped 0.5 percent to $1.1089.
The biggest winner was the Mexican peso, which has acted as something of a bellwether of sentiment as Trump's proposed policies are considered to be deeply negative for the country.
The peso 19.03 rose 2.2 percent to 18.61 to the dollar, hitting its highest level since Oct 26. - Reuters
Markets have tended to see U.S. presidential contender Clinton as the status quo candidate, and news favoring her bid often boosts risk appetite.
Dealers said safe-haven bonds were likely to soften on the news once trading got fully under way, while Asian stock markets might enjoy a mild relief rally.
News of the emails had helped Republican Donald Trump narrow Clinton's lead in some polls and unsettle markets globally. There is great uncertainty about what a Trump presidency might mean for economic policy, free trade and geopolitics.
The Mexican peso has acted as something of a bellwether of sentiment as Trump's proposed policies are considered to be deeply negative for the country. So far, the peso was steady at 19.03 per dollar
as there was little liquidity in the cross during Asian hours.
Risk-sensitive currencies such as the Australian dollar also gained on the yen and euro in early trade, with the Aussie climbing 1.2 percent to 80.11 yen .
The final NBC-Wall Street Journal poll released on Sunday showed Clinton holding a four-point lead over Trump. Clinton leads by a slender 1.8 points according to Real Clear Politics' polling average.
In Mexico too it's currency, peso, jumped after the FBI announced it stood by a previous decision to not charge Clinton over emails related to her private server.
CME-listed peso futures surged as electronic trading kicked off on Sunday evening (Monday morning in Malaysia), with the December contract up more than 2 percent at the highest since 0ct. 25. More than 2,800 contracts had traded, which was about triple the volume of trade last Sunday when weekly trading resumed.
Hedge funds and other speculators had ratcheted up bets against the peso in currency futures and options for the first time in four weeks last week, according to weekly positioning data from the U.S. Commodity Futures Trading Commission published on Friday.
Big speculators were net short the peso by more than 37,000 contracts, an increase of more than 11,000 contracts from the previous week. Still, that was well off the record short-position in the currency of more than 89,000 contracts from late September.
Trump has vowed to build a border wall between Mexico and the United States, threatened to rip up the North American Free Trade Agreement, block remittances back to Mexico and deport those living illegally in the United States. - Reuters