SYDNEY- Asian shares rose on Thursday while the dollar nursed losses after the world’s most powerful central banker reassured investors that US rates would fall this year, setting the scene for policymakers in Europe.
Japan’s Nikkei, however, reversed earlier gains and the yen jumped past the 149 per dollar level to the highest in a month as momentum builds that a move from the Bank of Japan to end negative interest rates could come as soon as this month.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent , while Japan’s Nikkei slid 0.9 percent , after hitting a fresh all-time high earlier in the session.
Japanese workers’ nominal pay in January grew 2 percent from a year earlier, data showed, accelerating from a gain of 0.8 percent the previous month. In other news, Japan’s major union won big pay hikes in 2024 wage talks. BOJ board member Junko Nakagawa said on Thursday the economy was moving steadily towards sustainably achieving the central bank’s 2 percent inflation target.
On speculation the BOJ could move this month, the dollar lost 0.5 percent to a one-month low of 148.67 yen.
There were muted reaction to better than expected China trade figures. China’s exports rose 7.1 percent in the January-February period from a year earlier, while imports increased 3.5 percent , both beating forecasts.
Chinese blue chips rose 0.1 percent and the Shanghai Composite index gained 0.2 percent . Hong Kong’s Hang Seng index was an outlier, down 0.2 percent .
Elsewhere, markets were mostly higher, with Taiwan’s share market hitting a record high, after Federal Reserve Chair Jerome Powell stuck to the script by saying the Fed still expects to cut rates later this year, even though continued progress on inflation “is not assured”.
That kept bets of a rate cut in June alive at an 84 percent probability. Longer-term bond yields slipped, gold prices hit a record high and oil jumped.
“There was nothing particularly surprising within Fed Chair Powell’s prepared monetary policy testimony to Congress – which is pretty short in fairness — or the Q&A session,” said James Knightley, chief international economist at ING.
“More data is required, but with more evidence of a cooling jobs market we still think they can cut rates from June.”