Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Asian shares hit three-week high ahead of crunch Fed meeting

Published 09/16/2015, 08:54 PM
Updated 09/16/2015, 08:59 PM
© Reuters.  Asian shares hit three-week high ahead of crunch Fed meeting

© Reuters. Asian shares hit three-week high ahead of crunch Fed meeting

By Hideyuki Sano

TOKYO (Reuters) - Asian stocks hit a three-week high on Thursday after a jump in oil prices lifted Wall Street, with many investors taking last-minute positions ahead of a crucial U.S. Federal Reserve policy announcement.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, hitting its highest level in three weeks while Japan's Nikkei average (N225) rose 1.4 percent.

Oil prices jumped on Wednesday, after the largest U.S. crude drawdown in seven months at the key U.S. delivery point eased worries about over supply, helping to boost battered energy stocks.

That in turn supported Wall Street shares, with S&P 500 index (SPX) rising 0.9 percent to 1,995.31, its highest close in almost a month, having pared just about a half of its fall from July to late August.

U.S inflation data, unveiled a day before the Fed's long-awaited policy decision later in the day, showed consumer prices unexpectedly fell in August.

Precious metal prices jumped as some market players took low the inflation reading to mean a smaller chance of an immediate rate hike.

Gold prices <XAU=> rose to 1.3 percent on Wednesday to $1,119.50 per ounce. Silver <XAG=> jumped 3.9 percent to $14.96 per ounce, its highest level in more than three weeks.

The dollar also lost its edge in the currency market after the data, with the currency's index against a basket of six major currencies (DXY) slipping to 95.323 from this week's high of 95.845.

"We believe that the Fed will refrain from raising rates today. But at the same time, it will indicate that it is highly likely to raise rates by the end of the year," said Tomoaki Shishido, fixed income analyst at Nomura Securities.

But there is little clarity on what the Federal Reserve will do on the whole.

U.S. money market futures hardly moved, still pricing in about one-in-four chance of a rate hike on Thursday.

On the other hand, the U.S. two-year note yield hit a 4 1/2-year high of 0.819 percent as investors expect the Fed will start its tightening cycle soon as the economy recovers, even if it does not do so this month.

The rise in Treasuries yields, also likely reflected selling by China, which needs to cash out dollars for its intervention to support the yuan, market players said.

The data published late on Wednesday showed China's holding of U.S. Treasuries dropped to $1.241 trillion in July from $1.271 in June.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.