Asian stocks see slight gains as the Fed rate path is closely watched

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Last Updated on September 15, 2022 by Bitfinsider

Following Wall Street’s advances on Thursday (15 September), Asian stocks largely nudged higher as markets recovered from last week’s market crash caused by stronger-than-expected US inflation data.

The report revealed that US monthly inflation was increasing and that US annual inflation was falling less than anticipated, fueling concerns that the US Federal Reserve would continue its aggressive tightening of monetary policy.

Tokyo, Hong Kong, Taipei, Singapore, Kuala Lumpur, and Jakarta’s stock exchanges all posted cautious increases on Thursday.

However, at the close, markets in Shanghai and Seoul were lower.

On Thursday, the European stock markets opened slightly higher.

According to analysts, markets were recovering from the severe losses that followed the release of the inflation statistics, and traders had priced in a 75 basis-point interest rate increase by the Fed at its meeting the following week.

The release of US producer pricing data, which showed costs declining for a second straight month, primarily due to falling US fuel prices, also had an impact on market mood.

Tokyo, the largest loser in Asia the day before, gained 0.2% after the close, but analysts said investors there were still nervous about the pace and magnitude of upcoming US rate hikes.

Stocks in Hong Kong ended the day 0.4% higher on Thursday.

As investors got ready for the Fed decision next week, Wall Street stocks jumped on Wednesday, with the Dow increasing 0.1% and the S&P 500 jumping 0.3%.

Any increase in US interest rates tends to boost the dollar, putting Asian currencies at danger from the strong dollar.

The yen was trading close to 143 to the US dollar on Thursday while the Australian dollar traded around a two-year low.

The yen was brought back from the 145 level, which the market generally views as a threshold, a day earlier when the central bank of Japan carried out a “rate check” operation on the currency. This action was considered as a forerunner to potential intervention.

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