Asian markets up after Bernanke comments
HONG KONG—Asian markets edged up on Thursday after a cautiously upbeat assessment of the US economy by the Federal Reserve and comments from its chairman that he would provide more support if necessary.
Earlier gains were pared as dealers await a Bank of Japan policy meeting on Friday, while ongoing concerns about Europe proved to be a weight on sentiment.
Tokyo was flat, adding 0.82 percent to close at 9,561.83, Seoul gained 0.10 percent, or 2.06 points, to 1,964.04 and Sydney was 0.34 percent, or 14.8 points, higher at 4,375.2.
Hong Kong gained 0.79 percent, or 163.42 points, to 20,809.71 and Shanghai was flat, edging down 2.17 points to 2,404.70.
While the Fed Wednesday said it would keep interest rates at super-low levels until at least 2014, it forecast the world’s biggest economy would grow more than first stated this year while unemployment would continue to fall.
However, it held off unleashing any more stimulus measures for now, instead sticking to its current loosening policy despite recent data showing the big pick-up in job creation had slowed.
After the two-day meeting chairman Ben Bernanke said further spending would be “reckless” but added that he was ready to use whatever tools he had at his disposal at any moment.
“We would not hesitate to use them should the economy require that additional support,” he said.
However, analysts remained cautious.
“Although the Fed has expressed a willingness to embark on further stimulus, in essence the central bank would need to see a deterioration in growth and weaker inflation to feasibly embark on another round of quantitative easing,” Christopher Gore, a Melbourne-based currency analyst at Go Markets, said in a note.
The Fed news boosted Wall Street’s main indexes, which were already on a roll following spectacular first-quarter earnings reports from Apple and Boeing.
The Dow climbed 0.69 percent, the Nasdaq jumped 2.30 percent and the S&P 500 jumped 1.36 percent.
Eyes are now on Tokyo, where the Japanese central bank is likely to hold interest rates at near zero but markets are hoping for another liquidity injection as the economy’s recovery stutters.
The Bank of Japan has already this year said it will pump tens of billions of dollars more into the system to help businesses and try to dig the country out of a painful deflationary cycle.
The euro bought $1.3244 and 107.42 yen in early European trade, compared with $1.3215 and 107.49 yen.
The dollar was at 81.12 yen compared with 81.33 yen.
The greenback slipped as some investors sold their holdings, after betting wrongly that the unit would rise following a verdict in the case of ruling-party kingpin Ichiro Ozawa, a dealer said.
One of the most powerful figures in Japanese politics, Ozawa is a staunch opponent of raising taxes to bring down the nation’s massive debt, with dealers saying the verdict could impact bond prices and the yen.
A Tokyo court Thursday cleared him of charges that he was involved in false political fund reporting.
Nervousness about Europe continued after Britain said it had slipped back into recession as the economy contracted 0.2 percent in the January-March quarter following a 0.4 percent shrinkage in the previous three months.
An economy is in technical recession when it posts two consecutive quarters of contraction.
And across the Channel political uncertainty in France and the Netherlands has raised concerns about a fiscal pact agreed by the eurozone last year, while weak economic data has also hit confidence.
On oil markets New York’s main contract, light sweet crude for delivery in June, rose 11 cents to $104.23 per barrel in the afternoon. Brent North Sea crude for June delivery rose 26 cents to $119.38.
Gold was at $1,647.04 an ounce at 1100 GMT, compared with $1,651.50 earlier Thursday.
In other markets:
— Singapore ended flat, edging up 1.69 points to 2,981.47.
Fraser and Neave gained 2.62 percent to Sg$7.06 and DBS Group rose 0.15 percent to Sg$13.72.
— Taipei fell 0.55 percent, or 41.83 points, to 7,521.35.
Acer fell 1.33 percent to Tw$33.45 while UMC was 0.34 percent higher at Tw$14.95.
— Manila closed 0.27 percent, or 14.13 points, higher at 5,218.97 to a new record high.
Philex Mining was up 7.02 percent at 25.90 pesos while subsidiary Philex Petroleum gained 35.8 percent to 33 pesos. DMCI Holdings bucked the trend to fall 3.88 percent to 60.55 pesos.
— Wellington ended flat, edging 0.97 points up to 3,520.82.
Contact Energy rose 0.63 percent to NZ$4.76, Fletcher Building was 0.16 percent lower at NZ$6.18 and Telecom fell 1.90 percent to NZ$2.58.
— Kuala Lumpur was flat, nudging 0.34 points up to 1,579.69.
Property firm UEM Land Holdings slid 2.0 percent to 1.99 ringgit while Hong Leong Financial Group dropped 1.3 percent to 12.04 ringgit but mobile phone operator DiGi.com climbed 2.5 percent to 4.06 ringgit.
— Jakarta gained 0.40 percent, or 16.66 points, to 4,180.31.
Telekomunikasi Indonesia rose 1.27 percent to 8,000 rupiah, Timah added 0.56 percent to 1,810 rupiah, and Semen Gresik gained 3.35 percent to 12,350 rupiah.
— Bangkok ended 0.66 percent, or 7.91 points, higher at 1,209.27.
— Mumbai fell 0.12 percent, or 20.62 points, to 17,130.67, its second straight day of losses, as power and auto stocks fell.
India’s private Tata Power fell 3.26 percent to 102.3 rupees while Sterlite, the local arm of global resources firm Vedanta fell 2.6 percent to 105.
