Asia stocks flirt with historic highs on global growth cheer

Activity was especially strong in Europe, lifting bond yields there and driving the euro to within a whisker of its highest in three years against a beleaguered U.S. dollar.

Investors also piled into emerging market trades, delivering a record peak for Philippine stocks, a 24-year top for Thailand and a decade-high for Hong Kong.

MSCI's index of Asia-Pacific shares outside Japan rose 0.4 percent, having jumped 1.4 percent on Tuesday in its best performance since last March.

At 579.46 the index is creeping ever closer to the all-time peak of 591.50 reached in late 2007.

Chinese blue chips gained for the fourth session running, while Japan's Nikkei was closed for holidays.

Wall Street started the new year as it ended the old, scoring another set of record closing peaks. The Dow rose 0.42 percent, while the S&P 500 gained 0.83 percent and the Nasdaq 1.5 percent.

The gains in riskier assets came as industry surveys from India to Germany to Canada showed quickening activity.

"The breadth of the recovery is extraordinary," said Deutsche Bank macro strategist Alan Ruskin, noting that of 31 countries covered, only three failed to show growth while all the largest manufacturing sectors improved.

"The global economy and risky assets are now solidly into a virtuous cycle, whereby growth is propelling risky assets like equities higher, that are then supporting growth," he added.

"This is not a global economy in need of the extraordinary emergency style policies pursued by the likes of the ECB and Bank of Japan."

Indeed, with euro zone factories expanding at their fastest pace in more than two decades, speculation is rampant that the European Central Bank will start to wind down its asset buying programme later this year.

As a result, yields on 10-year German paper climbed 4 basis points to a two-month top at 0.467 percent, which in turn pushed up rates across the European periphery.

Spanish yields, for instance, have risen 16 basis points in just three sessions to reach 1.616 percent.

The prospect that other major central banks could play catch up with the Federal Reserve on tightening undermined the dollar, which sank to a three-month trough against its peers.

The euro stretched as far as a four-month top of US$1.2082, adding to its 2017 gains of 14 percent. It was last at US$1.2050 and bulls were eyeing the September peak of US$1.2092, a break of which would return to ground last trod in early 2015.

The single currency has already reached a two-year high on the yen at 135.64, while the dollar lagged far behind at 112.32 yen.

The weakness of the dollar has been a positive for commodities priced in the currency.

Spot gold reached its highest since mid-September at US$1,321.33, before edging back to US$1,313.48 per ounce.

Oil prices hit their highest since mid-2015, only to stall when major pipelines in Libya and the UK restarted and U.S production soared to the strongest in more than four decades.