Asian stocks surged in thin holiday trade on Friday after ending 2025 on a subdued note. Regional trading volumes remained thin due to holidays in Japan, China and New Zealand.
The dollar made a feeble start to 2026 after suffering its sharpest drop in eight years amid mounting economic uncertainties and rate cut expectations.
Current head Jerome Powell's term ends in May and President Donald Trump already said that he wants to see interest rates go down to 1 percent.
U.S. economic data due next week, including the U.S. payrolls report and jobless data may provide additional clues on whether the next Federal Reserve chief would opt for deeper interest-rate cuts.
Oil climbed on the first trading day of 2026 after capping its biggest annual drop since 2020. Gold jumped nearly 1.5 percent, extending upward momentum after recording its biggest jump since the 1979 oil crisis in 2025.
Australian markets edged up slightly in their first session of 2026. The benchmark S&P/ASX 200 rose 0.15 percent to 8,727.80, led by gains in energy and healthcare stocks. The broader All Ordinaries index settled 0.20 percent higher at 9,036.60.
Mining and gold stocks underperformed after Northern Star Resources cut its annual production guidance. Shares of the gold miner plummeted 8.6 percent.
The Aussie dollar held near 14-month highs ahead of monthly inflation data due next week. Earlier in the day, a survey showed activity in Australia's manufacturing activity slowed in December.