DStv Channel 403 Thursday, 26 December 2024

Equities gain ahead of Fed, yen rebounds on intervention warning

HONG KONG - Most Asian stocks rose ahead of an expected pause in the US Federal Reserve's interest rate campaign, while the yen fell from its 2023 highs after Japan's top forex official said authorities were "on standby" to intervene.

The Fed is widely expected to keep borrowing costs on hold, with observers saying there is growing optimism that it has run its course after more than a year of hikes that have helped bring inflation down.

Elevated bond yields are also seen as acting as a substitute for further tightening, though decision-makers have for some time warned that rates will likely need to be kept high to completely win the battle against surging prices.

"The Fed is done, not just for this meeting, but for the cycle and the next move will be a rate cut," said Saxo Asia Pacific's Charu Chanana in a commentary.

The post-meeting news conference "could be key here, and more push on the 'higher-for-longer' message could still come as officials try to avoid the market undoing the work it has done for the Fed".

"This could mean they could continue to leave the door open for further tightening if needed."

Hopes the Fed has finished hiking helped Wall Street, with all three main indexes rising for a second straight day.

In Asia, Hong Kong extended losses that followed Tuesday's disappointing Chinese factory activity data.

But Shanghai, Sydney, Seoul, Singapore and Wellington rose.

Tokyo also pushed on with its own rally after the Bank of Japan stopped short of fully tweaking its monetary policy, even as it hiked inflation expectations.

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