Asia: Most stocks rise after Fed minutes show caution

[HONG KONG] Most Asian stocks ticked up Thursday, tracking gains on Wall Street after minutes from the Federal Reserve's July meeting showed caution about raising interest rates, supporting markets.

But Tokyo's main index sank as the dollar fell against the safe haven Japanese currency, slumping below 100 yen for the second time this week and hitting Japan's exporters.

US Federal Reserve policy makers last month believed risks to the US economy had lessened but wanted to keep their interest rate policy "options open", according to minutes released Wednesday, dampening hopes for an imminent rate hike.

The Federal Open Market Committee remained divided on the near-term danger of inflation, with some seeing little threat but others worried that there could be a sudden upward push on prices as the labour market continues to tighten.

"The message from the Fed is that they're going to be cautious in raising rates," Shane Oliver, Sydney-based global investment strategist at AMP Capital Investors Ltd. told Bloomberg News. "That's supportive of the share markets." Hong Kong stocks rallied 1.2 per cent in morning trade, while Shanghai was up 0.1 per cent, and Seoul added 0.3 per cent.

Wellington, Jakarta and Manila also rose.

But Tokyo dropped 0.4 per cent, as the stronger yen put pressure on exporters such as Toyota and Nissan, as it makes them less competitive overseas and tends to dent profits.

The dollar slumped to 99.83 yen from 100.28 yen Wednesday in New York.

A rise in US borrowing costs would tend to lift the greenback by stirring demand for dollar-denominated assets.

The Japanese market came under further pressure after fresh data Thursday showed exports slipped in July as shipments of vehicles, ships and steel products fell.

Sydney also declined 0.4 per cent.

Some energy stocks were up, while the oil price held gains from earlier in the week on a US inventories report showing significant declines in stockpiles of both crude and gasoline.

US crude inventories fell by 2.5 million barrels in the week to August 12, and gasoline stocks fell 2.7 million barrels, pointing to a modest strengthening of US demand.

Crude prices have been rising since the beginning of the week - with Brent edging closer to the US$50 mark - after comments from both Saudi Arabia and Russia that Moscow could soon join in with the Opec cartel in discussing production limits.

Prices eased slightly in Asia trade on Thursday. West Texas Intermediate was down one cent to US$46.78 a barrel while Brent was down 15 cents to US$49.70.

AFP