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London - European and Asian share markets rose on Monday, lifted by upbeat Chinese trade data and cautious optimism that the world's economy and markets can cope with a gradual withdrawal of US stimulus.
The moves helped both the dollar and the euro extend their gains on the yen, with the euro zone's currency hitting a new five-year high in what should be a boost to Japanese exports, profits and stocks.
The Nikkei climbed 2.3% in Tokyo and was fast approaching last week's peak at 15 794, leading a broad rise in Asian markets.
The upbeat sentiment carried into Europe, where despite a weaker start in France, Britain's FTSE 100 opened up 0.2% and the DAX climbed 0.5% as German trade data provided extra impetus.
While Friday's solid US jobs report may have brought forward the day when the Federal Reserve starts tapering its asset buying, the figures also suggested the economy was recovering well enough to withstand the move.
Persuading investors
A total of 203 000 jobs were added in November, while the unemployment rate dropped three-tenths of a percentage point to a five-year low of 7%.
A global macro strategist at UBS in London, Ramin Nakisa, said: "What is interesting is that markets are not pricing in any significant fall in stocks in January," referring to the month UBS expects tapering to start.
The Fed has had considerable success in persuading investors that tapering is not tightening and that interest rates will remain low for a long time to come.
Treasuries and European bonds remained resilient, with German bonds barely budged in early deals and 10-year US yields steady at 2.85% having briefly spiked to 2.93% on Friday.
The improvement in risk appetite knocked safe havens like the yen, lifting the US dollar as high as 103.23 yen on Monday and not far from last week's highs around 103.37 before it faded back to 102.90.
Dampened hopes
The euro had shot up to 141.55 yen, territory not visited since October 2008, while also making ground on the US dollar. It briefly touched $1.3748 early on Monday before edging back to last trade at $1.3703.
The currency has been underpinned by rising short-term interest rates after the European Central Bank dampened hopes for an imminent easing move.
Aiding sentiment in Asia was a set of robust trade numbers from regional powerhouse China over the weekend, encouraging the central bank to set the yuan at a fresh record high.
China's exports came in well above forecast in November, rising 12.7% from a year earlier, while imports rose 5.3%.
"The strength is likely supported by the recent improvement in global manufacturing activity, as evidenced by the strong (purchasing manager indexes) prints in major advanced economies," wrote analysts at Barclays.
That should be positive for many commodities with China importing a record amount of iron ore in November, while oil imports rebounded.
Crude oil futures
Prices for iron ore have been surprisingly firm around $139 a ton recently, good news for Australia as it is the country's single biggest export earner.
That helped the Australian dollar nudge ahead to as much as $0.9145 on Monday, well up from Friday's lows around $0.8989.
Emerging market attention remained on Thailand after Prime Minister Yingluck Shinawatra called for a snap election in an attempt to defuse the country's tensions.
The Thai baht rose almost 1% versus the dollar initially only to backslide along with Bangkok shares as anti-government protest leaders vowed to fight on.
US crude oil futures were trading 24 cents firmer at $97.65, having surged more than 5% last week. Brent edged around $111.61 a barrel.
Gold has not been so fortunate, stuck at $1 228.56 and only just above five-month lows.
