Asia Shares Advance after U.S. Reaches Debt Ceiling Deal

Following the weekend agreement between U.S. President Joe Biden and congressional leaders to lift the debt ceiling, Asian stocks jumped on Monday. Voting on the bill is anticipated for later this week.

As of 9.34 A.M. Bangkok time, the Nikkei 225 in Japan was 1.40% higher, having broken over the previous high set in July 1990 and continued to trade at its highest levels since then.

In Australia, the S&P/ASX 200 climbed 1.01%, while South Korean markets are closed Monday for a holiday.

Hong Kong’s Hang Seng index traded flat. The Shanghai Composite in mainland China rose 0.34%.

Stocks on U.S. Wall Street rose on Friday in anticipation of a debt ceiling agreement, marking the fifth consecutive week of gains for the Nasdaq Composite.

The tech-heavy index soared 2.2% on Friday, outperforming the S&P 500’s 1.3% rise. The Dow Jones Industrial Average increased by 1.0%. U.S. markets will be closed Monday for Memorial Day.

The U.S. President Joe Biden and the Speaker of the United States House of Representatives Kevin McCarthy came to an agreement to reach a tentative deal to suspend the federal government’s $31.4 trillion debt ceiling on Saturday evening. 

The deal would suspend the debt limit through January of 2025, while limiting spending in the 2024 and 2025 budgets, including a claw back on unused COVID funds and speed up the permitting process for some energy projects.

Still, the process is not done, the deal would have to pass the voting of the House, dominated by Republicans with 222-213 seats and Senate with a 51-49 Democratic majority, which would likely take place on Wednesday.