Stocks rise as Fed tamps down hike fears
Asian stocks and US futures rose yesterday after the Federal Reserve downplayed risks of an interest rate hike, while the yen was bumpy after another burst of suspected intervention from Japan.
Shortly after Fed Chair Jerome Powell had finished telling reporters the Fed may have to leave rates elevated, the yen surged against the dollar.
It was the second sudden leap in the ailing Japanese currency this week and markets suspect it was authorities stepping in as yen-buyers. The yen traded as strong as 153 to the dollar before sliding back to around 156 in Asia.
European futures were mixed, with EUROSTOXX 50 futures down 0.2 per cent while FTSE futures added 0.4 per cent.
S&P 500 futures rose 0.5 per cent, pointing to the cash market recouping a late slide on Wall Street. MSCI'S broadest index of Asia-pacific shares outside Japan climbed 0.7 per cent, led by a 2 per cent surge in Hong Kong.
Tokyo's Nikkei was little changed.
Oil was nursing a heavy fall on demand worries and a surprise jump in US stockpiles. Brent crude futures were up 54 cents a barrel to $83.98, after touching a seven-week low of $83.29 yesterday. US crude was at $79.52 a barrel.
The Fed had left interest rates on hold and Powell told reporters that inflation was too high and progress in bringing it down was uncertain. have gone up sharply while Japan's stayed ultra-low. But he did not entertain growing speculation the Fed may need to hike rates. The dollar was last up about 0.8 per cent to
"There are paths to not cutting and there are 155.80 yen, the euro was up 0.9 per cent at paths to cutting. It's really going to depend on 167.00 yen and the Aussie was trading near the data," he said, which traders interpreted as 102 yen. Tokyo money market data indicated all but ruling out a rate hike. Japanese authorities may have spent nearly
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"The key takeaway is the Fed still thinks billion buying the yen on Monday, not much more likely the next move is a cut, than long after it had touched 160 per dollar, lows a hike, and the door is very much open," said last visited over three decades ago.
Ray Attrill, head of foreign exchange strategy "There is persistent pressure on the yen to at National Australia Bank in Sydney. weaken in the medium to long term," said Hirofumi
Treasuries rallied, pushing yields lower, Suzuki, chief FX strategist at SMBC as the Fed also said it would slow its balance-sheet in Tokyo. runoff. However, in Asia some of "Even if there is FX intervention, it will not that move was unwound. Ten-year Treasury change the yen's depreciation trend. The Fed's yields rose 2.3 basis points to 4.614 per cent in monetary policy developments remain most Tokyo, having fallen 9.3 basis points in New important in the medium to long term."
York yesterday. On the earnings front chipmaker Qualcomm
Two-year yields, which fell more than beat market expectations for sales and profit, 10 bps in New York overnight, rose 1 bp to sending its shares up 4 per cent in after-hours 4.9497 per cent. trading.
After pricing in as many as six rate cuts for Focus later on Thursday (local time) would 2024 earlier this year, markets now price only be on Apple results, where markets have one, in December. braced for a big drop in sales and are waiting to hear of the company's plans for AI in iphones.
Outside of oil, trade in other commodities was subdued by holidays in China, where markets are closed for the rest of the week. Gold rose overnight and was last holding at $2,314.44 in Asia trade.
Intervention watch
In foreign exchange trade all eyes were on the yen, which after a leap in late New York trade spent much of the Asia session giving up a majority those gains. The yen has been on a downtrend for years as global interest rates