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Asia: Markets rise after Federal Reserve chief boosts US confidence
[HONG KONG] Asian markets rose on Wednesday, tracking a Wall Street rally after the head of the Federal Reserve expressed confidence in the US economy despite fears of a global trade war.
Federal Reserve chief Jerome Powell offered a positive outlook citing a strong job market and inflation figures in line with Fed targets, sending US stocks higher.
"Powell's testimony was music to investor's ears as the Dow gained for the 4th consecutive day while the Nasdaq hit a new high-water mark", said Stephen Innes, head of Asia-Pacific trading at OANDA.
But Mr Powell acknowledged uncertainty over the "outcome of current discussions over trade policy", with US President Donald Trump hitting out at China and other economic partners as he adopts an aggressive "America First" policy.
Fears about an all-out China-US trade war continue to rattle investors, with both sides lodging counter-complaints at the World Trade Organization after recently imposing and threatening further tariffs on billions of dollars worth of goods.
Washington's traditional allies Japan and the EU have also not been spared from hefty US tariffs.
In a move described by officials as a "clear message" against protectionism, the EU and Japan signed a sweeping free trade deal on Tuesday, eliminating tariffs for a wide range of products from Japanese cars to French cheese.
Japanese exporters advanced in early trading Wednesday with Toyota rising 1.55 per cent to 7,489 yen, Honda climbing 0.96 per cent to 3,355 yen and Panasonic up 1.10 per cent at 1,459 yen.
Tokyo rose one percent on the back of a cheaper yen as the dollar strengthened following Powell's upbeat view of the US economy.
Hong Kong and Singapore also edged up 0.4 per cent while Sydney climbed 0.7 per cent.
Oil made a modest recovery overnight after plunging on fears of a glut amid concerns that a looming US-China trade war would dampen demand.
But it steadied slightly after Libya's state oil company announced a halt to exports at its Zawiya terminal citing a fall in production after an attack on workers.
"Oil has had some big falls. But every time it drops recently there seems to be some sort of supply disruption news that puts the bid back in the market," said Greg McKenna, chief market strategist at AxiTrader.
"That's what we saw again overnight with the news that more than half a million barrels a day of production were about to be shuttered for maintenance in Venezuela.
"We also heard another force majeure at a Libyan port to disrupt supplies. That helped crude bounce from the lows which were a continuation of the previous day's weakness," Mr McKenna added.
But both main contracts fell again following a report late Tuesday by the American Petroleum Institute that US crude stockpiles had increased by more than 600,000 barrels last week.