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TOKYO: Asia stocks hovered near four-month highs on Monday after a mixed performance on Wall Street at the close of last week, while the dollar firmed against the yen following strong US job and manufacturing data.
MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat. It had scaled a four-month peak on Friday along with a surge in its global peers.
Trade was subdued with many of the region’s markets closed for the Lunar New Year. China’s financial markets are closed all week, while those in South Korea are shut until Thursday.
Hong Kong’s Hang Seng, which is trading for only half a day, edged up 0.2%.
Japan’s Nikkei added 0.5%.
On Wall Street on Friday optimism from a surge in January US job growth was offset by a weaker-than-expected outlook from Amazon.com Inc that battered retail stocks. The Dow nudged up 0.26% while the Nasdaq shed 0.25%.
“Key points for the markets this week will be how the remaining US corporate earnings releases turn out, and whether they are in line with recent upbeat data,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
“While corporate earnings and fundamentals remain key, political developments, notably the US-China trade situation, remain potential risk factors,” he said.
A US Labor Department report on Friday showed nonfarm payrolls jumped by a stronger-than-forecast 304,000 jobs last month, the largest gain since February 2018.
That report, along with better-than-expected ISM manufacturing activity numbers for January, pointed to underlying strength in the world’s biggest economy.
“After last week’s risk appetite revival, the data pulse and the tone of Fed speakers will be important. For the Goldilocks market to continue, we need to find a delicate balance between improving data and still-neutral central banks,” strategists at ANZ wrote.
Global equity markets performed strongly last week after the Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle.
Friday’s robust economic data triggered a sharp rebound in US Treasury yields, in turn lifting the dollar.
On Monday, the US currency was a shade higher at 109.555 yen after advancing 0.6% on Friday.
The euro was little changed at $1.1456 after getting pulled back from a high of $1.1488 on Friday.
The Australian dollar was mostly steady at $0.7244 after slipping 0.4% the previous session.
The benchmark 10-year U.S. Treasury yield was at 2.686% after climbing nearly 6 basis points on Friday to pull away from a four-week low of 2.619% earlier last week.
West Texas Intermediate (WTI) US crude oil futures extended Friday’s rally and were last up 0.3% at $55.42 per barrel.
On Friday, WTI futures had rallied 2.7% on the upbeat US job report, signs that Washington’s sanctions on Venezuelan exports have helped tighten supply and data showing US drillers cut the number of oil rigs. – REUTERS
SYDNEY, Feb 1 — Asian shares ticked up to four-month highs today on hopes the leaders from the United States and China could strike a trade deal and as the Federal Reserve appeared to have all but abandoned a plan to raise borrowing rates further….
KUCHING: Bursa Malaysia Bhd’s (Bursa) disappointing fourth quarter of financial year 2018 (4QFY18) results has led to a downgrade in earnings forecasts by analysts. In a press release on Wednesday, Bursa reported a profit after tax and minority interest (PATAMI) of RM224 million for the financial year ended December 31, 2018 (FY18), an increase of […]
TOKYO: Asia stocks rose to a four-month high on Thursday after the Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle amid signs of slowing global growth.
The dollar struggled near a three-week trough against its major peers and US Treasury yields were significantly lower as investors reacted to the Fed’s change in tone.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose to its highest since Oct 4 and was last up 0.7%.
Japan’s Nikkei rose 0.9%.
The Shanghai Composite Index climbed 0.8% despite data showing China’s factory activity contracted for a second straight month amid weakening orders.
Australian stocks edged up 0.1%.
The Fed on Wednesday held interest rates steady as expected, and also discarded its promises of “further gradual increases” in interest rates.
The central bank said it would be “patient” before making any further moves amid a suddenly cloudy outlook for the US economy due to global growth risks and impasses over trade and government budget negotiations.
On Wall Street, the Dow and the Nasdaq rallied 1.7% and 2.2%, respectively, on hopes the Fed’s pause would give the US economy and corporate profits more room to run.
Late in December the Dow had sunk to its lowest level since September 2017, dogged by factors including worries over cooling economic growth and trade tensions, adding pressure on the Fed to reassess its tightening bias.
“The Fed’s statements firmly confirmed its dovish stance, which had already been on display at the start of the year. Market concerns towards the Fed’s rate hikes have now been put to rest,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
“The mention of the balance sheet by the Fed was a positive surprise. The focus now shifts immediately to US-China trade talks, but the equity markets could have enough cushioning to withstand negative news from the talks.”
The US central bank also said on Wednesday that its balance sheet would remain larger than previously expected.
However, while market expectations for Fed tightening may have waned significantly, some analysts suggested rate hikes still remained a near-term possibility.
“While many of the risks to the US outlook remain in place, there is little to suggest that the outlook has changed by as much as the Fed communication says it has,” wrote Michael Gapen, chief US economist at Barclays.
“We worry that the Fed has traded near-term support for financial markets and the economy for another round of volatility later this year if it is forced to lift rates higher, which remains more likely than not, in our view.”
With the Fed decision out of the way, investors focused their attention on a pivotal round of high-level US-China trade talks which began on Wednesday aimed at easing a months-long tariff war.
The two-day talks in Washington are expected to be tense, with little indication so far that Chinese officials are willing to address core US demands to fully protect American intellectual property rights and end policies that Washington has said force US companies to transfer technology to Chinese firms.
If the two sides cannot reach a deal soon, Washington has threatened to more than double tariffs on Chinese goods on March 2.
In currencies, the dollar index against a basket of six major currencies struggled near a three-week low of 95.253 brushed on Wednesday, when it had sunk 0.5%.
A weaker dollar helped nudge the euro to $1.1501 on Wednesday, its highest since Jan 11, and the common currency was last up 0.15% at $1.1493.
The greenback was down 0.15% at 108.88 yen and close to a two-week low of 108.81 reached overnight.
The pound was steady at $1.3117, given some reprieve after slipping earlier in the week when British lawmakers voted down a proposal in parliament that could have prevented a potentially chaotic “no-deal” Brexit.
The benchmark 10-year US Treasury yield extended its decline to as far as 2.674%, its lowest since Jan 14.
Oil prices rose after US government data showed signs of tightening supply and as investors remained concerned about supply disruptions following US sanctions on Venezuela’s oil industry.
US crude oil futures were up 0.7% at 54.59 per barrel. – REUTERS
TOKYO, Jan 31 — Asia stocks rose to a four-month high today, tracking Wall Street, after the Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle amid signs of slowing global…