HONG KONG- Asian shares rose on Tuesday, tracking Wall Street higher, though investors looked to a much-anticipated Federal Reserve policy meeting to see if the central bank would signal any change to the US monetary policy outlook.
Japan’s Nikkei rose 0.89 percent in early trading and MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.23 percent.
An early driver was Australian shares, which rose 1.03 percent, though Chinese blue chips dropped 0.16 percent and Hong Kong fell 0.21 percent. All three resumed trading after being shut on Monday for a public holiday.
Overnight the S&P 500. and Nasdaq closed at record highs, helped by tech names, though the Dow Jones Industrial Average fell 0.25 percent.
US stock futures, the S&P 500 e-minis, were also up 0.11 percent.
“We are still getting markets responding positively to the lower volatility in the bond markets and lower yields, and a sense that inflation will be reasonably temporary and the Fed won’t have to slam the breaks on,” said Kyle Rodda, market analyst at brokerage IG.
“I suspect in the next 24-48 hours we’ll see a lot of chop, first on the upside, then a little correction as the market positions itself, and then we’re off to the races if we get the green light from the Fed Thursday morning,” said Rodda.
Traders will look closely at any hints from the meeting’s final statement about whether and when the Fed plans to taper its bond buying program, amid concerns from some quarters about inflation as the US economy bounces back from the pandemic fallout. The two-day meeting starts on Tuesday.
Nearly 60 percent of economists in a Reuters poll expect a taper announcement will come in the next quarter, despite a patchy recovery in the job market.
