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Asian and European shares edged higher on Friday following the US Senate’s approval of a budget proposal for fiscal year 2018 that could permit them to enact US President Donald Trump’s proposed tax plans.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up by 0.4 percent to $550.80, after hitting a 10-year peak on Tuesday, but was still a bit down for the week.  

Japan’s Nikkei 225 closed 0.04 percent higher to ¥21,458, following its 14th highest session on Thursday, its longest streak since 1961.

Strait Times Singapore (STI) rose by 0.1 percent to S$3,340.73, after gaining 0.1 percent in the previous day, taking year-to-date performance to about 16 percent.

Hong Kong’s Hang Seng index climbed to HK$28,502.50, recovering 1.2 percent from Thursday’s 1.9 percent loss, it worst fall in two months. Shanghai Composite in mainland China increased 0.2 percent to CN¥3,378.65.

South Korea’s KOSPI closed up with a 0.6 percent gain to ₩2,489.54, while Australia’s S&P/ASX 200 raised 0.1 percent to A$5,906.99.Thailand’s SET index was up by 0.5 percent to ฿1,692.58.

European shares opened higher on Friday after ending a lower session a day earlier, finding support from the Senate’s decision of granting passage for the budget plan.

The Euro Stoxx 50 scaled 0.2 percent to €3,609.50, while Germany’s DAX increased 0.2 percent to €13,023, after dropping 0.4 percent on Thursday.

Spain’s IBEX 35 recovered 0.04 percent to €10,200, after falling 0.07 percent to €10,188 earlier.  

France’s CAC 40 gained 0.1 percent to €5,378.30, while UK’s FTSE 100 climbed 0.2 percent to £7,540.75, after both slid 0.3 percent in the previous day. 

US Senate Approves $4 Trillion Budget Plan

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By a 51-49 vote, the Senate Republicans passed the $4 trillion budget measure late Thursday, which would allow tax cuts to add up to $1.5 trillion to the federal deficit over 10 years.

Republicans are incapable of cutting taxes without initially passing the budget resolution, hence giving them a strong reason to support it.    

Approving the budget paves the way for the GOP to pass a tax reform bill through the Senate with simple 50 or more votes, removing the need for winning support from Democratic senators.

The Republican Party sees overhauling the nation’s tax system to be very important in fulfilling campaign promises and preventing an electoral setback next year.

Tax cuts have also been a crucial policy goal for the GOP ever since they failed to pass several proposals to rewrite Obamacare, which has put them under extreme pressure.

Republicans have not yet presented a solid tax bill. Constructing the whole plan will start once the House and Senate is able to pass a budget resolution.     

Trumps’ proposed tax reform plan aims to cut corporate income tax rate from 35 percent to 20 percent, which would create jobs and improve wages for blue-collar workers. It also promises to bring up to $6 trillion in tax deductions to businesses and individuals.

However, the Democratic Party is against the plan as the members believed that it would benefit the wealthy, increase taxes on middle-class Americans, as well as open the door to expanding the federal deficit.

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