Asia shares rise before Yellen testimony
Asia’s markets have edged up, with investors sitting on the sidelines as they await the first testimony by the Federal Reserve’s new head to discover her plans for its stimulus program.
Janet Yellen, who took over as the bank’s chairwoman at the start of the month, was to testify to a House of Representatives committee later on Tuesday on the state of the economy and the course of monetary policy.
Sydney rose 0.62 per cent, or 32.4 points, to close at 5,254.5 and Seoul added 0.46 per cent, or 8.76 points, to 1,932.06.
Hong Kong jumped 1.78 per cent, or 383.72 points, to 21,962.98 and Shanghai rose 0.84 per cent, or 17.60 points, to 2,103.67.
Tokyo was closed for a public holiday.
The latest gains indicate traders’ nerves might have settled after the turmoil seen earlier in February when the Fed said it would further reduce its bond-buying scheme and US and Chinese manufacturing data came in below forecast.
Markets brushed off a second straight set of poor jobs data on Friday, with some blaming severe winter weather for the weak growth, while also pointing to positive news such as a rise in labour force participation.
Yellen’s testimony will be pored over to see if she gives any indication that the central bank will slow down its stimulus tapering. In December, the Fed said it would cut its monthly purchases by $US10 billion ($A11.21 billion) to $US65 billion. It then announced a similar move this month, sending markets spinning.
Credit Agricole said investors would be keen to see if she maintains a doveish bias on the drawdown, against the backdrop of a more hawkish policymaking committee in the Fed.
“While we do not expect any major deviations from the Fed’s current outlook, her interpretation of the recent softening in US data will be an important driver for markets,” it said.
“Against this backdrop, the extent she views the recent soft patch in data as a function of weather-related effects (and other seasonal distortions) could support policy normalisation,” it said.
Wall Street provided a positive lead for Asia. The Dow edged up 0.05 per cent on Monday, the S&P 500 gained 0.16 per cent and the Nasdaq rose 0.54 per cent.
In forex trade, the euro ticked up to $1.3659 and 139.69 yen compared with $1.3642 and 139.46 yen in New York.
The dollar was at 102.25 yen against 102.18 yen.
Oil prices were mixed. New York’s main futures contract, West Texas Intermediate for delivery in March, was down six cents to $100.00 a barrel in afternoon trade. Brent North Sea crude for March delivery was up two cents to $108.65.
Gold fetched $1,283.73 an ounce at 0810 GMT compared with $1,272.60 late on Monday.
In other markets:
– Taipei rose 0.46 per cent, or 38.61 points, to 8,430.56.
Taiwan Semiconductor Manufacturing Co added 1.46 per cent to Tw$104.5 while leading chip design house MediaTek was 2.20 per cent higher at Tw$419.0.
– Wellington rose 0.33 per cent, or 15.83 points, to 4,848.88.
Fletcher Building was up 1.89 per cent at NZ$9.15 and Telecom gained 0.63 per cent to NZ$2.39.
– Manila was 1.06 per cent higher, adding 63.78 points to 6,106.03.
Bank of the Philippine Islands rose 0.23 per cent to 87.60 pesos, SM Investments added 0.79 per cent to 700.50 pesos and BDO Unibank gained 1.14 per cent to 79.90 pesos.