Hong Kong: Most Asian markets shrugged off profit-taking Wednesday and pressed on with a new year rally that has sent Hong Kong to successive records, though the dollar suffered fresh losses against its major peers.
Optimism about the global economy which was reinforced this week by the International Monetary Fund, strong earnings reports and Donald Trump's tax cuts have helped fuel a surge in global equities which many expect to continue.
"The earnings season is going phenomenally well, and the government shutdown on Friday was reversed (on Monday) so we've got the government behind us for the next couple of weeks," Phil Orlando, chief equity market strategist at Federated Investors, told Bloomberg News.
"But the reason the stock market is up is very simply that investors are reflecting on the fact that earnings are much better than expected."
Adding to the buying spree in equities is what some analysts describe as the "fear of missing out" on the money-making rally.
Regional investors looked to have run out of puff in the morning, though, with most indexes falling into the red on profit-taking.
But Hong Kong bounced back in afternoon business to sit 0.2 percent higher and touch a new record high, while Shanghai ended up 0.4 percent.
Sydney and Singapore each rose 0.3 percent, while Seoul put on 0.1 percent. Wellington, Mumbai, Bangkok and Kuala Lumpur were also higher.
However, Tokyo was unable to join the recovery and fell 0.8 percent, with exporters hit by a strengthening yen.
Taipei and Manila also fell while Jakarta retreated from Tuesday's record close.
On currency markets the dollar sell-off continued as investors bet on tighter monetary policies by major central banks, bringing them in line with the Federal Reserve.
Markets are also spooked by possible trade frictions after Trump slapped stinging tariffs on imports of solar panels and washing machines, while talks on revising the NAFTA pact begin.
Sterling held above the $1.40 mark it broke Tuesday on the improving chances of a "soft" British exit from the European Union.
"The rumours of a softer stance from Belgium have helped the move from a pound perspective, but this move is undoubtedly a US dollar decline," said James Hughes, chief market analyst at AxiTrader in Britain.
The euro was at three-year highs ahead of the European Central Bank's latest policy meeting, which will be pored over for clues about its policy stance. A strong reading on German investor confidence also provided a boost.
The greenback fell below 110 yen for the first time since September as data showing a strong trade surplus overshadowed the Bank of Japan's decision Tuesday not to tighten monetary policy just yet nor provide a timetable for such a move.
"The big challenge for the BoJ is how to deal with investors' expectations, as any tweak in policy will be viewed as an opportunity to hammer the (dollar) mercilessly lower" against the yen, said Stephen Innes, head of Asia-Pacific trading at OANDA.
Most other high-yielding currencies were also higher, with the Australian dollar up 0.5 percent and China's yuan 0.2 percent higher to sit at more than two-year highs.
As well as the ECB meeting, attention is also this week on the Davos meeting of the business and political elite, where Trump is due to speak before the weekend.
Tokyo - Nikkei 225: DOWN 0.8 percent at 23,940.78 (close)
Hong Kong - Hang Seng: UP 0.2 percent at 32,991.68
Shanghai - Composite: UP 0.4 percent at 3,559.47 (close)
Euro/dollar: UP at $1.2315 from $1.2300 at 2130 GMT
Pound/dollar: UP at $1.4035 from $1.4001
Dollar/yen: DOWN at 109.96 yen from 110.32 yen
Oil - West Texas Intermediate: UP four cents at $64.51 per barrel
Oil - Brent North Sea: DOWN seven cents at $69.89 per barrel
New York - DOW: FLAT at 26,210.81 (close)
London - FTSE 100: UP 0.2 percent at 7,731.83 (close)