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Asia cheers China trade boost, bitcoin shoots for the stars

SYDNEY (Reuters) – Asian shares rallied for a second session on Friday as economic news from China and Japan beat all expectations and investors marveled at the meteoric ascent of bitcoin, the market’s new crypto-star.

Beijing reported exports surged 12.3 percent in November from a year earlier, more than double the forecast, while imports climbed almost 18 percent.

Iron ore and copper imports enjoyed a stellar rebound, which could help stem a recent pullback in commodity prices.

Japan’s Nikkei .N225 led the way as the yen eased on the dollar, rising 1.1 percent on top of Thursday’s 1.45 percent bounce to be almost back where it started the week.

Revised data showed Japan’s economy growing twice as fast as first thought as business spending jumped.

Australian stocks put on 0.3 percent while MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.7 percent.

Bidders were encouraged by a steadier performance on Wall Street, where the Dow .DJI rose 0.29 percent. The S&P 500 .SPX gained 0.29 percent and the Nasdaq .IXIC 0.54 percent.

Still to come was U.S. nonfarm payrolls, with investors looking for 200,000 new jobs in November and much talk wages might show some welcome strength.

Also on the radar are negotiations between the United Kingdom and Ireland on how to run their post-Brexit land border. British Prime Minister Theresa May was reported to be meeting European Union chief executive Jean-Claude Juncker in Brussels early Friday.

Speculation about an agreement saw sterling rebound to $1.3492 GBP=, having been as low as $1.3320 at one point on Thursday.

It was one of only a few currencies to gain on the U.S. dollar, which was otherwise broadly firmer.

The U.S. currency cleared 113.00 yen to reach 113.34 JPY=, while the euro touched a two-week low at $1.1763 EUR=. Against a basket of currencies the dollar held firm at 93.848 .DXY.

Bitcoin BTC=BTSP crested above $16,666 on the Bitstamp exchange having doubled in value in just two weeks. Other exchanges quoted prices as high as $22,000, intensifying the debate about whether it is a bubble about to burst.

It was last quoted at $15,120 in very choppy trade.

The largest U.S. cryptocurrency exchange has been struggling to manage record traffic, with an imminent launch of the first bitcoin futures contract further fuelling investor interest.

Some, however, warned the coming of futures might prove to be the downfall of the digital darling.

“Dragging bitcoin into the futures market poses a risk of big players opening doors to short-selling hell,” said Naeem Aslam, chief market analyst at Think Markets UK.

“Futures markets make it possible to short in decent size with a lot of liquidity, thus affecting the price discovery in the underlying asset market.”

The spectacular rise of the cryptocurrency has stolen some thunder from gold bulls, providing an asset that is also seen as a hedge against inflation and government interference.

Gold steadied at $1,258.10 XAU=, having finally breached its recent tight trading range to hit a four-month trough at $1,245.60.

“Demand for gold relative to supply has had centuries to reach an equilibrium,” noted Alan Ruskin, a macro strategist at Deutsche Bank. “Bitcoin global demand is still finding its place relative to constrained/inelastic supply.”

Oil prices had gone the other way as a threatened strike by oil workers in Nigeria forced a bout of short covering.

Brent futures LCOc1 were barely changed at $62.19 a barrel, having climbed 98 cents overnight. U.S. crude CLc1 was off 4 cents at $56.65.

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