Asia Stocks Jump, Fed Refrains From Stimulus Cut
Since the financial crisis of 2008, the Fed has been in emergency mode, and has slashed interest rates and pumped trillions of dollars into the U.S. economy to prevent the recession in the world's largest economy from turning into a depression. That objective has been achieved but the U.S. economic recovery has been paltry by historical standards.
Earlier, the Nikkei 225 in Tokyo shot up 1.8 percent to close at 14,766.18, even though government data showed a bigger-than-expected trade gap. Elsewhere, Hong Kong's Hang Seng advanced 1.7 percent to 23,502.51 and Australia's S&P/ASX 200 added 1.1 percent to close at 5,295.50. Benchmarks in Indonesia and Thailand rose 4.7 percent and 3.3 percent respectively. The Philippines, India and Singapore also posted strong gains. Markets in South Korea and mainland China were closed for public holidays.
The market moves were not confined to stocks. The dollar was sold off in the immediate aftermath of the Fed statement as investors priced in the prospect of more dollars swirling round financial markets. On Thursday, the currency stabilized, with the euro up 0.3 percent at $1.3552 and the dollar 1.2 percent higher at 98.32 yen.
"The Fed's action last night should further delay a dollar recovery," said Jane Foley, senior currency strategist at Rabobank International.Oil prices also steadied after the previous day's big gains, with the benchmark New York rate down 6 cents at $107.24 a barrel. Gold remained in the ascendant as investors fretted that the extended stimulus may stoke inflation â¿¿ the price for an ounce of the precious metal was up $57.50 at $1,365.10.
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