Asian stock markets boosted by Yellen vow to keep interest rates low

By , on May 8, 2014

asia stock market

SEOUL, South Korea—Asian stock markets gained ground Thursday after Federal Reserve Chair Janet Yellen vowed low borrowing rates would continue until the U.S. job market is healthy and tensions eased in geopolitical hotspot Ukraine.

Tokyo’s Nikkei 225 stock index, the region’s heavyweight, advanced 1.5 per cent to 14,237.82 and South Korea’s Kospi added 0.2 per cent to 1,944.15.

Hong Kong’s Hang Seng rose 0.6 per cent to 21,871.09 and China’s Shanghai Composite gained 1.1 per cent to 2,032.31. Australia’s S&P/ASX 200 rose 0.9 per cent to 5,483.

Stocks in Taiwan, Singapore and the Philippines also rose while Thailand and Indonesia were down.

Yellen told lawmakers Wednesday that the U.S. job market is “far from satisfactory.” She said the Fed will begin increasing interest rates only when there is enough progress in restoring full employment and when inflation is back up to its target of 2 per cent.

Yellen’s comments appeared to ease concerns that the Fed might move too quickly to raise interest rates.

Russian President Vladimir Putin’s softening tone in the confrontation with the West over Ukraine also lifted investor sentiment. Putin said Russia pulled its troops away from the border with Ukraine, although NATO and Washington said they hadn’t seen indication of a pullback. Putin also endorsed plans for fresh elections in Ukraine following the ouster earlier this year of its pro-Russian leader.

On Wednesday, U.S. stock markets finished higher, despite big losses in tech stocks, such as Twitter Inc. The Standard & Poor’s 500 gained 0.6 per cent to close at 1,878.21. The Dow Jones industrial average climbed 0.7 per cent to 16,518.54.

The tech-heavy Nasdaq was the only major index to fall. It fell 0.3 per cent to 4,067.67.

In energy markets, benchmark U.S. crude for June delivery was up 6 cents to $100.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.27 to close at $100.77 on Wednesday.

In currency trading, the euro rose to $1.3917 from $1.3912 late Wednesday. The dollar fell to 101.84 yen from 101.88 yen.