Investing.com – Asian stocks rose on Wednesday after widening trade surplus in China, falling industry activity index in Japan and Federal Reserve Chair Janet Yellen’s reassurance that U.S. monetary authorities will keep policy accommodative.
National Bureau of Statistics of China reported on Wednesday that country’s trade surplus in January widened to CNY31.86 billion from CNY25.6 billion in December. Markets were expecting a surplus of CNY 23.65 billion. Exports rose 10.6% against an expectation of 2% while imports rose 10% against an expectation of 3%.
In Hong Kong China Mengniu Daily Co., China’s second largest milk producer rose 7.6% on the news of Euro 486 million investment by Danone to increase its share to 9.9% in the company.
In Japan, Ministry of Economy, Trade and Industry reported on Wednesday that tertiary industry activity index for December fell by 0.4% against an expected fall of 0.2%. In November it had risen by 0.8%.
Japan’s machinery orders in December also fell 15.7% from the previous month on a seasonally adjusted basis against an expected decline of 4.1%. In November they had risen by 9.3%.
Nissan Motor Co. rose 2% after 57% rise in its net income in the latest quarter, while Dai-Ichi Life Insurance Company rose 1.4% on it plans to buy Sompo Japan DIY Life Insurance and offer low cost coverage by next year.
In Australia, Westpack Banking Corporation reported that the consumer sentiment Index fell 3% in February against a fall of 1.7% in January.
Meanwhile Statistics New Zealand reported on Wednesday that country’s electronic card retail sales in January fell by 0.5% as against a rise of 0.06% in December. The market had expected a similar rise in January as well. The YoY rise in the electronic case sales was 6.1% as against the previous rise of 5.5%.
Shanghai rose 0.84%, Hang Seng was up 1.78%, Nikkei rose 0.47% and S&P/ASX was up 0.31%.
On Tuesday, the U.S. stocks rose sharply. At the close of U.S. trading, the Dow Jones Industrial Average rose 1.22%, the S&P 500 index gained 1.11%, while the Nasdaq Composite index rose 1.03%.
Speaking before the House Financial Services Committee earlier, Fed Chair Yellen suggested that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected.
The Fed is currently purchasing USD65 billion in Treasury holdings and mortgage debt a month to suppress interest rates to spur recovery, which sends stocks rising to encourage investment and hiring.
“Let me emphasize that I expect a great deal of continuity in the Federal Open Market Committee’s approach to monetary policy,” she said.
Still, Yellen added that the pace of the central bank’s bond purchases are not on a “preset course” and reiterated that the Fed plans to hold interest rates near zero “well past” the time the jobless rate falls below 6.5%.
Furthermore, Yellen said that "recovery in the labor market is far from complete" despite progress seen over the last year, describing the country's 6.6% unemployment rate as "well above levels" that Fed officials consider sustainable in a healthy economy.
Yellen's words, while in line with market expectations, kept sentiments firm that monetary authorities will trim asset purchases on a gradual basis, while tightening remains far off on the horizon, conditions that are supportive for further stock gains.
The Fed rolled out its bond-buying program in September of 2012. Since then, the Fed purchased USD85 billion in bonds a month until late 2013, when it began tapering the program.
Leading Dow Jones Industrial Average performers included Boeing, up 2.33%, Johnson & Johnson, up 2.05%, and Goldman Sachs, up 1.99%.
The Dow Jones Industrial Average's worst performers included Cisco, down 0.48%, Coca-Cola, which was up 0.17%, and American Express, up 0.26%.