Asian stocks cheered by fed reassurance: Reuters

22.05.2013 12:50
Asian stocks cheered by fed reassurance: Reuters

YEREVAN, May 22. /ARKA/. Asian stocks rose on Wednesday following a positive lead from Wall Street, with Japan's Nikkei reaching a fresh 5-1/2 year high and clinging to its gains as the Bank of Japan stood pat after unleashing massive stimulus last month.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.1 percent, reversing some of Tuesday's 0.4 percent decline. The South Korean market .KS11 climbed 0.8 percent.

Tokyo's Nikkei .N225 gained 1.2 percent, breaking above 15,500 for the first time in over five years.
"The buying just doesn't stop," said Kenichi Hirano, operating officer at Tachibana Securities.
"If the Nikkei gets above 15,500, volatility could increase, trading could become choppy, but with foreigners still buying Japanese shares the trend might still point upward for a while."

The Nikkei held on to its gains, and the yen moved little against the dollar, after the Bank of Japan kept its monetary policy unchanged as expected. The BOJ maintained its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 60 trillion to 70 trillion yen ($585-$682 billion).

Stock markets took heart after two senior Federal Reserve officials dampened market speculation that the U.S. central bank might start tapering its stimulus program this year.

That helped the Dow .DJI and the S&P 500 .SPX close at new all-time highs on Tuesday. .N
Markets will be looking for more clues on the Fed's next move when Chairman Ben Bernanke testifies before Congress later on Wednesday.

His remarks will be followed by the release of minutes of the last Fed meeting, which economists expect to give further details of how it will eventually manage the exit from ultra-easy policy.
The dollar inched up 0.1 percent versus the yen to 102.56 yen, with investors lacking conviction before Bernanke's testimony.

Westpac currency strategist Sean Callow said he expected the dollar to drop towards 100 yen over the next few days or weeks.

"Bernanke should help it on its way but we may need soft payrolls data in early June to confirm this," he said.

Callow said yen weakness was still driven heavily by speculative positioning, and Japanese demand for foreign bonds was still small. A stronger economy would encourage Japanese to keep money at home and possibly plough more into the domestic stocks, he said.

"Moreover, we view the relative success of Abenomics into 2014 as positive for yen, not negative," he said. –0--


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