Asian Stocks Up, but Sky-High Valuations Cap Gains Ahead of Fed Policy Decision By Investing.com

© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were mostly up Wednesday morning, but already-high valuations ahead of the U.S. Federal Reserve’s latest policy decision put a cap on gains.

Japan’s fell 0.34% by 10:52 PM ET (2:52 AM GMT) as the country reported a 5.2% increase in year-on-year in March, higher than both the 4.7% increase in forecasts prepared by Investing.com and February’s 1.5% contraction.

South Korea’s fell 0.82%.

In Australia, the gained 0.46% after released earlier in the day missed forecasts. The CPI rose 0.6% and 1.1% during the first quarter of 2021.

Hong Kong’s was up 0.24%. An immigration bill that some argue could prevent Hong Kong residents and others from entering or leaving the city, is up for a second reading in the Legislative Council and could be passed later in the day.

China’s inched up 0.07% and the was up 0.29%.

Bonds fell as the benchmark climbed back above 1.6% ahead of the Fed handing down its later in the day.

Some investors were optimistic that the central bank would take a more positive tone, even as they expect no major changes to policy itself.

“We expect the Fed’s tone on the economy to be more positive than at the March meeting, reflecting the ongoing pickup in the data, but we don’t expect any substantive new signal yet on tapering,” TD Securities analysts said in a note.

“While we do not expect much price action due to the Fed decision, Biden’s remarks could continue to suggest more incoming supply, bear steepening the Treasury yield) curve,” the note added.

However, investors will look for any hints that the Fed will pull back on asset purchases as the economic outlook continues to improve, as they remain concerned that any withdrawal of support could trigger volatility in global rates and risk assets.

“This is a Fed which is oriented toward the market, they’ve boxed themselves in, in the sense that they’ve given the market a lot of reason to depend on them… if Fed chairman [Jerome Powell] changes tack you’re going to have a massive market correction,” Sri-Kumar Global Strategies Inc. president Komal Sri-Kumar told Bloomberg.

U.S. President Joe Biden will also give an address in front of a joint session of Congress later in the day, his first as president. Investors will be monitoring the address for further clues on infrastructure and stimulus spending.

Also on the data front, the U.S. will release its for the first quarter of 2021 on Friday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Be the first to comment

Leave a Reply

Your email address will not be published.


*