Asia Stocks Rise as Yellen Dovish Comments Lift Risk Appetite

Asian stocks advanced after Federal Reserve Chair Janet Yellen signaled the U.S. central bank remains wary of raising interest rates while threats remain to domestic growth from a slowing global economy.

The Topix index fell in Tokyo after Yellen’s comments strengthened the yen, souring the outlook for Japanese exporters.

The MSCI Asia Pacific Index gained 0.5 percent to 128.34 as of 9:03 a.m. in Tokyo. The measure is on course to post its largest monthly advance since October, climbing 7.7 percent to pare its quarterly loss to 2.7 percent. It is appropriate for U.S. central bankers to “proceed cautiously” in raising rates because the global economy presents heightened risks, Yellen said in a speech to the Economic Club of New York. The yen traded at 112.71 after strengthening 0.7 percent Tuesday.

Yellen’s comments helped the Standard & Poor’s 500 Index rise 0.6 percent, its biggest jump in more than two weeks, erasing this year’s losses. E-mini futures on the gauge added 0.1 percent percent.

Traders are now pricing in no chance of a U.S. rate increase in April, while odds for June slid to 28 percent from 38 percent on Monday. The probability of higher borrowing costs doesn’t rise above 50 percent until November.

Japan’s Topix index dropped 0.5 percent. Australia’s S&P/ASX 200 Index climbed 0.7 percent. South Korea’s Kospi index rose 0.5 percent and New Zealand’s S&P/NZX 50 Index added 0.3 percent. Markets are yet to open in Hong Kong and China.

Source : Bloomberg


Asian Stocks Decline as Weak Yuan Fix Weighs on Risk Appetite

Asian stocks fell for a third day as concern about the strength of China’s economy deepened a rout that’s wiped about $ 2 trillion from the value of global equities this year.

The MSCI Asia Pacific Index lost 0.9 percent to 127.23 as of 4:04 p.m. in Hong Kong. Japanese exporters slumped after China set a weaker fix for the yuan, while Apple Inc. suppliers tumbled on a report it may cut production. North Korea conducted a nuclear test Wednesday, adding to geopolitical risk. Stocks in Shanghai surged the most in three weeks amid government efforts to shore up the market.

North Korea added to geopolitical concerns after tension spiked earlier this week between Saudi Arabia and Iran. North Korea detonated a hydrogen device at an underground test site in the far northeast, the regime’s official news agency said. The test is the second since Kim Jong Un became supreme leader, and is a setback for U.S. and Chinese efforts to restart disarmament talks. South Korea’s Kospi index declined 0.3 percent, paring losses of as much as 1 percent.

The MSCI Asia Pacific Index has lost 3.6 percent since the beginning of the year, for the biggest three-day decline since September.

The Hang Seng Index declined 1.1 percent on Wednesday, extending declines this week to 4.3 percent, and the Hang Seng China Enterprises Index fell 0.9 percent, bringing its losses in 2016 to 5.4 percent. The Shanghai Composite Index rallied 2.3 percent, following a two-day 7.1 percent slide featuring a plunge on Monday that wiped out $ 590 billion of market value and triggered a trading halt.

Japan’s Topix gauge retreated 1.1 percent after earlier jumping as much as 0.7 percent, as the weaker yuan undermined the competitiveness of the country’s exporters. The index has dropped 3.8 percent during the first week of the year.

Asian suppliers of Apple Inc. phones sank after Japan’s Nikkei Asian Review reported the world’s biggest company would reduce the output of its latest iPhones by about 30 percent in the first quarter of 2016. Sharp Corp. slumped 3.3 percent, Japan Display Inc. lost 3.5 percent and Alps Electric Co. sank 3.2 percent.

Australia’s S&P/ASX 200 Index dropped 1.2 percent and New Zealand’s S&P/NZX 50 Index slid 0.3 percent. Singapore’s Straits Times Index fell 1 percent and Taiwan’s Taiex Index retreated 1.1 percent.

Futures on the S&P 500 tumbled 0.9 percent Wednesday. The U.S. equities gauge rose 0.2 percent Tuesday after slipping 1.5 percent in the previous session.

Source: Bloomberg