SINGAPORE – Asian shares rose on Thursday on growing expectations that major central banks could start slowing the pace of interest rate hikes in coming months, while the dollar’s retreat lifted commodities and pushed treasury yields lower.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.59 percent higher and set for third straight session of gains. The index is down roughly 2 percent for the month.
Australia’s resources-heavy share index advanced 0.81 percent, while Japan’s Nikkei opened 0.09 percent lower.
China stocks have had a turbulent week, headlined by Monday’s brutal selloff as global investors dumped Chinese assets, worried that President Xi Jinping’s new leadership team would put ideology before the economy.
But an increasing expectation among investors that the Federal Reserve along with other central banks may stall their aggressive rate-hike policies has helped soothe investor jitters and blunted the dollar’s rally.
“Yields are generally lower globally as the earlier run up in expectations for central bank tightening are pared a little further,” said Taylor Nugent, a markets economist at National Australia Bank in Sydney.
Nugent also noted the Bank of Canada on Wednesday announced a smaller-than-expected rate rise of 50 percentage points, and saying it fanned expectations that the Fed would start the shift to a similar sized rate rises in December.
US Treasury yields fell, helped by a weaker dollar and the expectations of the Fed becoming less hawkish.
Meanwhile, earnings report from Facebook parent Meta Platforms Inc. on Wednesday and Samsung Electronics Co Ltd. spurred worries of a downturn after some of Europe’s largest banks also warned of growing risks as the economy fizzles. — Reuters
