* MSCI Asia-Pacific index up 0.75 pct, Nikkei climbs 1.9 pct
* Dollar off lows as U.S. yields rise amid improved risk appetite
* U.S. crude struggles near 8-month lows
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Shinichi Saoshiro
TOKYO, Nov 8 (Reuters) - Asian stocks rose to a one-month peak on Thursday as investors, relieved to have moved past the U.S. midterm elections without any major political surprises, drove a Wall Street rally, while the dollar bounced and pulled away from 2-1/2-week lows.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5 percent.
Hong Kong’s Hang Seng advanced 0.9 percent and the Shanghai Composite Index climbed 0.35 percent.
Australian stocks rose 0.5 percent, South Korea’s KOSPI added 1.4 percent and Japan’s Nikkei gained 1.9 percent.
Wall Street’s main indexes rose more than 2 percent on Wednesday, led by the technology and healthcare sectors as the market breathed a sigh of relief after the U.S. midterm elections, in which Democrats wrested control of the House of Representatives and Republicans retained the Senate.
“Going forward, we think the removal of uncertainty and realization of the expected outcome should be supportive for risk assets,” Goldman Sachs analysts said in a report.
While a divided Congress will make it harder for President Donald Trump to push through new legislation, such as additional tax cuts, investors do not expect a reversal of recently enacted tax cuts and deregulation.
“The key point after the midterm elections is that U.S. stocks showed they had developed immunity towards higher yields. The last time long-term Treasury yields were at this level a month ago, they had helped trigger a major fall by stocks,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
“Steady U.S. fundamentals will support this trend of equities and yields rising in tandem, which should also prop up the dollar in the longer term.”
The 10-year Treasury note yield rose to 3.25 percent on Wednesday, its highest since Oct. 9, with Wall Street’s rally reducing demand for safe-haven debt. It last stood at 3.23 percent.
The dollar index against a basket of six major currencies gained 0.2 percent to 96.188, pulling back from 95.678 plumbed on Wednesday, its lowest since Oct. 22.
That low for the greenback was driven by a knee-jerk reaction to the U.S. midterm election results, with a divided Congress seen dulling Trump’s fiscal stimulus drive.
Some focus was also on the Federal Reserve’s monetary policy due later on Thursday. The Fed, however, is not expected to hike interest rates until its next gathering in December and analysts expected this meeting to have limited market impact.
The central bank has tightened monetary policy three times in 2018, with the latest rate hike coming in September.
“A split Congress is unlikely to materially alter the Fed’s near-term hiking trajectory and the Fed will be biased to keep raising rates until the data or financial conditions turn,” strategists at Bank of America Merrill Lynch wrote.
The euro was up 0.05 percent at $1.1432 after pulling back sharply from a high of $1.1500 brushed earlier on Wednesday.
The dollar was a shade higher at 113.59 yen and in striking distance of a one-month peak of 113.82 reached the previous day.
In commodities, U.S. crude futures inched up 0.05 percent to $61.70 a barrel after falling to an eight-month trough of $61.20 on Wednesday.
Brent crude dipped 0.08 percent to $72.01 a barrel following a loss of 1.4 percent the previous day.
Oil prices struggled after surging U.S. crude output hit another record and domestic inventories rose more than expected. (Editing by Sam Holmes & Shri Navaratnam)