Asian markets mostly rose Monday as traders gear up for huge central bank meetings in the US and Japan this week, hoping authorities press on with their loose monetary policies.
Concern that years of cheap cash could be coming to an end has roiled markets this month with conflicting comments from top Federal Reserve officials over the need for an interest rate hike fuelling uncertainty.
And a lack of any concrete promises from Tokyo about the Bank of Japan’s plans have also been cause for worry, with years of bond-buying and government spending having little impact on the country’s torpid economy.
“There are growing concerns about the limits of monetary policy’s impact on growth,” Bernard Aw, a markets strategist in Singapore at IG Ltd, said in an e-mail to clients.
“Unlike the Fed, where investors have a binary view—hike or no hike—of US monetary policy, the BoJ presents a complicated situation. Governor (Haruhiko) Kuroda has repeatedly stressed that they still have many policy tools at their disposal.”
In early trade Hong Kong rose 0.5 percent as investors returned from a three-day weekend to play catch-up with Friday’s regional rally.
Shanghai, which was also closed Thursday and Friday, was up 0.6 percent while Seoul gained 0.6 percent and Singapore added 0.4 percent. Sydney, however, was 0.3 percent lower.
Tokyo was closed for a public holiday.
The dollar held on to most of Friday’s gains against the pound and euro after the release of data showing an uptick in inflation during August.
The euro bought $1.1162 in Asia, down from $1.1156 in New York and well off the $1.1242 earlier in Tokyo Friday. The pound was at $1.3031 compared with $1.3004 in US trade and $1.3215 earlier Friday. The dollar was also at 102.22 yen from 102.27 yen.
On oil markets, prices climbed as fighting erupted in Libya, with forces loyal to the UN-backed unity government launching an offensive Sunday to retake key ports seized last week by fighters from a rival administration.
The commodity had fallen to a one-month low prior to the unrest in the country, which has Africa’s largest reserves. West Texas Intermediate was up 70 cents at $43.73 and Brent added 68 to $46.45.
However, gains will be limited owing to a global supply glut and
overproduction. Traders are keenly awaiting a meeting between OPEC and Russia next week aimed at addressing the issue, although there are worries about the chances of a deal being reached.
- Key figures around 0230 GMT –
Shanghai – Composite: UP 0.6 percent at 3,020.11
Hong Kong – Hang Seng: UP 0.5 percent at 23,459.23
Tokyo – Nikkei 225: Closed for public holiday
Euro/dollar: UP at $1.1162 from $1.1156 late Friday
Pound/dollar: UP at $1.3031 from $1.3004
Dollar/yen: DOWN at 102.22 yen from 102.27 yen
New York – DOW: DOWN 0.5 percent at 18,123.80 (close)
London – FTSE 100: DOWN 0.3 percent at 6,710.28 (close), reports AFP, HONG KONG,.