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Asian stocks rise on US rate relief

stocks rise

MSCI’s broadest index of Asia-Pacific shares, excluding Japan, increased by 0.4%

Asian stocks experienced gains on Thursday, while the dollar faced losses following reassurances from the central banker that U.S. interest rates would decrease this year. This development has set the stage for policymakers in Europe.

However, Japan’s Nikkei index reversed its earlier gains, and the yen surged past 149 per dollar, reaching its highest level in a month. This surge in momentum suggests that the Bank of Japan may end negative interest rates as early as this month.

Meanwhile, MSCI’s broadest index of Asia-Pacific shares, excluding Japan, increased by 0.4%. On the other hand, Japan’s Nikkei index declined by 0.9% after reaching a new all-time high earlier in the session.

Data revealed that Japanese workers’ nominal pay in January grew by 2% compared to the previous year, accelerating from a gain of 0.8% in the previous month. Additionally, Japan’s major union achieved significant pay hikes in wage talks for 2024.

A board member of the Bank of Japan, Junko Nakagawa, stated that the economy was progressing steadily towards achieving the central bank’s 2% inflation target.

Due to speculation surrounding a potential move by the Bank of Japan this month, the dollar experienced a 0.5% decline, reaching a one-month low of 148.67 yen.

China’s better-than-expected trade figures received a muted response. In the January-February period, China’s exports rose by 7.1% compared to the previous year, while imports increased by 3.5%, surpassing forecasts.

Chinese blue chips rose by 0.1%, and the Shanghai Composite index gained 0.2%. However, Hong Kong’s Hang Seng index experienced a decline of 0.2%.

In other markets, most stocks saw an upward trend, with Taiwan’s share market reaching a record high. This was influenced by Federal Reserve Chair Jerome Powell’s affirmation that the Fed still intends to cut rates later this year, despite uncertainties regarding continued progress on inflation. This has led to an 84% probability of a rate cut in June. As a result, longer-term bond yields decreased, gold prices reached a record high, and oil prices surged.

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