Asian stocks rose broadly on Wednesday, encouraged by a positive lead from Wall Street, after comments from two Federal Reserve officials suggested the Federal Reserve is unlikely to taper its $85 billion-per-month bond-buying program anytime soon. Investors look forward to a speech from the Fed Chairman Ben Bernanke and the release of FOMC May minutes due out later in the day for clues on the interest rate outlook and exchange rate movements.
Japanese shares extended gains for the fourth straight session, supported by a weakening yen after the Bank of Japan maintained its plan to expand the monetary base aimed at beating deflation. Reaffirming its latest easing measures, the central bank’s policy board said the bank will conduct money market operations so that the monetary base will increase at an annual pace of about JPY 60-70 trillion. The bank also committed to purchase seven-year government bonds so that their amount outstanding will increase at an annual pace of about JPY 50 trillion.
The Nikkei average rose 1.6 percent to 15,627, its highest closing level since December 26, 2007, while the broader Topix index closed 0.4 percent higher. Among exporters, Canon rose 2.4 percent, Kyocera climbed 4.9 percent and Fanuc added 2.7 percent. All Nippon Airways jumped 6.3 percent and Japan Airlines advanced 4.6 percent on reports that Tokyo’s Haneda airport will finish a runway expansion work early. Sony Corp. soared 5.9 percent on a Nikkei report that the struggling electronics giant is considering spinning off its entertainment division.
Utility Tokyo Electric Power Co. plunged 9.6 percent on profit taking, snapping a 4-day rally, while rival Chubu Electric Power rose 1.4 percent. Olympus Corp. rallied 8.5 percent on hopes of improvement in its medical instrument business. Sojitz Corp. soared 13 percent on reports of a likely 30 percent rise in the company’s pretax profit in the next financial year.
In economic releases, Japan posted a merchandise trade deficit of 879.936 billion yen in April, the Ministry of Finance said – slipping into the red for the ninth consecutive month. The headline figure missed forecasts for a shortfall of 620.6 billion yen. Exports were up 3.8 percent to 5.777 trillion yen from a year earlier, also missing forecasts for a gain of 5.4 percent.
China’s Shanghai Composite index edged down 0.1 percent on profit taking after recent gains as investors awaited preliminary manufacturing data due out on Thursday for direction. Hong Kong’s Hang Seng index slipped half a percent after the morning’s trading session was cancelled due to a storm warning.
Australian shares ended modestly lower, paring early gains, after a survey by Westpac and Melbourne Institute showed confidence among Australian consumers declined sharply in May to its lowest level since August 2012, driven largely by negative responses to the Federal Budget. The consumer sentiment index fell 7 percent to 97.6 from 104.9 in April, marking its lowest reading since August 2012. The survey also revealed that pessimists outnumbered optimists in May for the first time since October 2012. The benchmark S&P/ASX 200 slipped 15 points or 0.3 percent to 5,165.
Banks extended their recent declines, with ANZ, Commonwealth and NAB all ending down over a percent each. Global miner BHP Billiton, which carries a prospective dividend yield of 3.8 percent, rose 1.3 percent, while Rio Tinto shares advanced 1.8 percent. Seven West Media slumped nearly 8 percent after U.S. private equity firm Kohlberg Kravis Roberts & Co. sold its $264 million holding in the Australian broadcaster.
Seoul shares edged higher on mounting optimism the Fed will maintain its stimulus policies. The benchmark Kospi average closed 0.6 percent higher at 1,994.
New Zealand shares rose, mirroring firm regional cues. The benchmark NZX-50 index rose 19 points or 0.4 percent to 4,610. Retirement village operator Ryman Healthcare rallied 2.7 percent to a record high, SkyCity Entertainment Group, which has agreed to buy the Wharf Casino in Queenstown, added 0.9 percent and exporter Fisher & Paykel Healthcare gained 0.7 percent ahead of its results tomorrow. Fletcher Building, the nation’s largest construction company, advanced 1.8 percent after affirming its earnings guidance. Among those that fell, Chorus and NZX lost 2-3 percent.
Elsewhere, Indonesia’s Jakarta Composite index, Malaysia’s KLSE Composite and Singapore’s Straits Times index were up about 0.4 percent each and the Taiwan Weighted average edged up 0.2 percent, while Indian shares were subdued.
U.S. stocks posted modest gains overnight after home improvement giant Home Depot raised its sales and profit outlook for the year and comments from two Federal Reserve officials suggested the Federal Reserve remains far from winding down its bond-buying program. The Dow rose 0.3 percent, while the tech-heavy Nasdaq and the S&P 500 edged up about 0.2 percent each.
by RTT Staff Writer
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Asian Stocks Rise On Fed Speculation
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