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Wall Street shares notched a new record peak with the release of an optimistic US employment report and more stimulus expected from global policymakers. A day after these upbeat events, Asian shares rallied to a 2 ½-month high on Tuesday.

The Japanese Nikkei 225 had climbed 2.5% with investors expecting the Asian country’s government may place $100 billion in fiscal spending, possibly funded by the Bank of Japan (BoJ)’s money-printing, in hopes to support the economy.

Gains in the sectors of Finance & Investment, Transportation Equipment and Financial Services drove Japanese shares higher on Tuesday.

Taiwan Weighted surged 0.63%, reaching a new 6-month high at the close. Taiwanese shares were led higher by Optoelectronic, Plastic, and Oil, Gas & Electricity gains.

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Meanwhile, stocks in emerging markets such as in Indonesia, Thailand and India claimed their highest levels in a year in the market today. Yukino Yamada, senior strategist at Daiwa Securities, said that emerging stocks are in a upsurge at present due to the lack of US rate hikes.

“For emerging markets, the worst thing is a U.S. rate hike. But right now because U.S. rate hikes seem unlikely while the U.S. data was strong and economic fundamentals.”

The recent surge in share prices prompted Japanese Prime Minister Shinzo Abe to call for a new round of fiscal stimulus following the triumph for his presiding coalition. While Abe withheld details, it is vaguely estimated to hit 10 trillion yen, or $97.5 billion.

Wall Street, US Market

On the other hand, the S&P 500 Index on Wall Street hit a new record high on Monday, the first time again in more than a year. The US stock index extended gains after Friday’s job data dampened concerns about employment slowdown.

S&P 500’s newly-reached peak, the benchmark ending at 2.137.16, has overtaken the previous record of 2,130.82 claimed last on May 21, 2015.

Meanwhile, globally low interest rates from central bank stimulus in both Europe and Japan are boosting risk assets. In the prior week, bond yields in the US, Japan, Germany, France and Britain slumped to record lows as investors anticipated on further stimulus after Brexit.

The US decade-old bond yield tumbled to as low as 1.32% earlier this July and last settled at 1.45%, below US core consumer price inflation above 2%. A senior portfolio manager at DIAM, Hisashi Iwama, stated that US real rates are standing negative. “It is inconceivable that U.S. shares will crumble when real interest rates are negative.”

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The upsurge was partially driven by investors purchasing high-dividend and defensive stocks, seeking safety from negative or low rates in Japan and Europe. True enough, defensive shares best performed on the S&P 500 sector since the prior record. Stocks in Utilities, Telecoms and Consumer staples all reached double-digit percentage gains.

However, strategists claimed that the rally is likely to be brief and unmaintainable. “The rally is supported not so much by economic fundamentals as liquidity,” said Daisuko Uno, the chief strategist at Sumitomo Mitsui Bank.

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