Asian Markets Gain after Yellen’s Comments

Asian equities and currencies advanced with government bonds after Janet Yellen signalled the Federal Reserve won’t rush to tighten monetary policy. The dollar weakened for a fourth straight day, with a gauge of the currency hitting a 10-month low.

Standout stock markets included Seoul’s Kospi Index at a record high and Hong Kong’s Hang Seng Index at the strongest in two years, after the Dow Jones Industrial Average closed at an all-time high. South Korea’s central bank held its benchmark rate, as expected, while Chinese exports grew more than forecast as global demand proved resilient. Australian sovereign debt followed gains in Treasuries after Yellen expressed confidence in the U.S. economy and signalled monetary tightening would be gradual. Oil held above $45 a barrel. Canada’s dollar gained after the first rate hike there in seven years.

Yellen’s testimony diverted attention from Donald Trump Jr.’s emails about his meeting with a Russian lawyer, though concern remains that the latest saga in Washington may waylay efforts to reform taxes and boost spending. The Fed chair’s gradualist tone on policy came after signals from central banks around the world that accommodative policies may no longer be needed as the global economy strengthens.

These are the main moves in markets:

Stocks

· Hong Kong’s Hang Seng Index climbed 1.1 percent to its highest since July 2015 as of 1:00 p.m. local time. A gauge of Chinese companies listed in Hong Kong jumped 1.5 percent, while the Shanghai Composite Index gained 0.4 percent.

· Japan’s Topix index fluctuated and was last up 0.1 percent. Australia’s S&P/ASX 200 Index strengthened 1.1 percent, the most since July 4. South Korea’s Kospi Index climbed 1.2 percent.

· Futures on the S&P 500 were up 0.1 percent. The underlying gauge advanced Wednesday to just 0.4 percent shy of its closing record. The Dow Jones Industrial Average rose 123 points to a record 21,532.

Currencies

· The yen strengthened 0.1 percent to 113.06 per dollar, after climbing 0.7 percent Wednesday in its biggest gain for more than a month. The Korean won rose 0.8 percent, the most since May 25, to 1,136.80 per dollar.

· The U.S. dollar was down against all G-10 peers. The Bloomberg Dollar Spot Index fell 0.1 percent to its lowest since September 2016. The gauge has lost 0.7 percent this week.

· The Canadian dollar rose 0.1 percent after jumping 1.3 percent Wednesday. The pound rose 0.1 percent and the euro was up 0.2 percent.

· The Brazilian real gained 1.4 percent Wednesday after former President Luiz Inacio Lula da Silva was convicted of graft and money-laundering. The Mexican peso rose 0.1 percent.

Commodities

· Wheat for September delivery on the Chicago Board of Trade dropped 1.4 percent to $5.29 a bushel, down a second day. The U.S. Department of Agriculture said domestic production will be greater than analysts expected.

· West Texas Intermediate crude was steady at $45.50 a barrel. It climbed 1 percent the previous session after data showed crude inventories fell 7.56 million barrels last week.

· Gold added 0.2 percent to $1,223.31 an ounce, a fourth day of gains.

Rates

· The 10-year U.S. Treasury yield slid for a fourth day, down one basis point to 2.31 percent. The yield on Australian government notes with a similar maturity dropped three basis points to 2.695 percent.

Source: Bloomberg

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