Hong Kong (AFP) – Asian stocks rose Friday in line with a rally on Wall Street as a drop in oil prices eased inflation concerns, while investors were awaiting a Bank of Japan interest rate decision later in the day. The Federal Reserve’s hike in borrowing costs this week provided some relief to traders concerned that policymakers were not moving quick enough to address a spike in inflation that could deal a blow to the world’s top economy.
That has been helped by news that Saudi Arabia was moving to restore within days about half of crude shipments disrupted by the stoppage of its East-West pipeline to the Red Sea. The conduit, even more important since the effective closure of the Strait of Hormuz by Iran, was shut last week after being targeted by Yemen’s Iran-backed Houthis. Crude prices, which had soared around a fifth in September, have fallen around five percent from recent highs, with West Texas Intermediate dipping below $100 for the first time since Friday.
The surge in oil has been among the main catalysts for rising inflation since the United States and Israel began their war on Iran at the end of February. And the latest fall-off provided some much-needed support to stocks. Seoul, Tokyo, Hong Kong, Shanghai, Sydney, and Taipei all advanced, though there were small losses in Singapore, Wellington, and Manila. The latest moves in oil and the Fed’s action reassured investors and kept the 10-year US Treasury bond yield—a key indicator of borrowing costs throughout the world’s biggest economy—back below five percent.
On currency markets, the yen slipped against the dollar ahead of the BoJ announcement, which is widely expected to be a 25-basis-point hike in interest rates. But analysts said that with the lift already factored in, the focus will be on what is said afterwards. “Given the degree of pricing, the rate decision itself may have limited impact on the yen,” said Chris Weston at Pepperstone. “Instead, attention should fall on the forward swaps curve and the Bank’s guidance around the pace and urgency of further tightening. Governor (Kazuo) Ueda’s press conference will therefore be key. The market will be looking for confirmation that further normalisation remains firmly on the table, while assessing whether the Bank sees any urgency to move again.”
– Key figures at around 0200 GMT –
Tokyo – Nikkei 225: UP 0.7 percent at 64554.64
Hong Kong – Hang Seng Index: UP 0.9 percent at 24,834.41
Shanghai – Composite: UP 0.8 percent at 3,907.64
Dollar/yen: UP at 156.28 yen from 155.96 yen on Thursday
Euro/dollar: DOWN at $1.1478 from $1.1480
Pound/dollar: UP at $1.3359 from $1.3358
Euro/pound: DOWN at 85.93 pence from 85.94 pence
West Texas Intermediate: DOWN 0.7 percent at $101.23 per barrel
Brent North Sea Crude: DOWN 0.8 percent at $104.03 per barrel
New York – Dow: UP 0.6 percent at 51,778.04 (close)
London – FTSE 100: UP 1.2 percent at 10,816.14 (close)
© 2024 AFP
