Asia: Markets mostly up as dollar holds gains after Fed

[HONG KONG] Most Asian markets mostly rose on Thursday, kicking off February on a positive note after recent losses, while the dollar ticked up on expectations the Federal Reserve will speed up interest rate hikes this year.

Eyes are now on the release of US jobs data later in the day, with another strong reading likely adding fuel to talk that US borrowing costs will continue to rise.

After Janet Yellen's final meeting as governor, the Fed's policy board said while it remains below target, the bank expects inflation to move up this year and noted economic growth, investment and unemployment were all going in the right direction.

"There was a subtle and distinct upgrade to the language around the expansion in the US economy with employment, household spending, and business fixed investment said to 'have been solid'," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

The Fed's comments provided a lift the dollar, although it is still under pressure against most of its peers in recent weeks as central banks around the world look to tighten monetary policy more in line with the US.

However, Mr McKenna said that with Donald Trump enjoying a strong economy, the dollar could pull away again, adding that his plans for big infrastructure spending could fire inflation even more, leading to further rate hikes.

On equity markets Tokyo rose more than one percent by the break thanks to a weaker yen and on bargain-buying following a six-day losing streak. Hong Hong added 0.1 per cent and Sydney was 0.7 per cent higher while Seoul also put on 0.1 per cent.

Singapore was flat and Taipei jumped 0.8 per cent but Shanghai fell 0.3 per cent.

Regional stocks have mostly fallen this week on profit-taking following a blistering January that saw many indexes hit record or multi-year highs.

Traders in New York provided a positive lead for their Asian counterparts, shaking off a two-day sell-off as they welcomed another round of upbeat corporate earnings.

They were also buoyed by Mr Trump's broadly positive State of the Union address that struck a conciliatory note towards the Democrats and called on their support for a US$1.5-trillion infrastructure investment plan.

AFP