Global markets: Asian stocks edge higher on Fed Chief's dovish stance on rate change
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 per cent in early trade, not far from its five-month high marked on Monday.
Asian shares edged higher on Wednesday and the dollar fell to a three-week low after Federal Reserve Chairman Jerome Powell reinforced the US central bank's recent shift towards a more "patient" approach on policy in the face of a slowing economy. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 per cent in early trade, not far from its five-month high marked on Monday. Japan's Nikkei share average gained 0.4 per cent, while Australian stocks rose 0.3 per cent.
The Fed is in "no rush to make a judgment" about further changes to interest rates, Powell told US lawmakers on Tuesday as he spelled out the central bank`s approach to an economy that is likely slowing. In two hours of testimony to the Senate Banking Committee, Powell elaborated on the "conflicting signals" the Fed has tried to decipher in recent weeks, including disappointing data on retail sales and other aspects of the economy that contrast with steady hiring, wage growth, and ongoing low unemployment.
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More evidence of the hot and cold economy was in evidence overnight, with weaker-than-expected US housing data and a rosy consumer confidence report.
US homebuilding tumbled to a more than two-year low in December as construction of both single and multi-family housing declined, which overshadowed the rebound in consumer confidence in February after three months of declines.
The contrasting data points left Wall Street underpowered, with the benchmark S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite closing down 0.1 percent each.
"Chairman Powell`s comments were neutral and the economic data released overnight was mixed, insufficient to provide implications for the Fed`s policy and directions to the market," said Yasuo Sakuma, chief investment officer at Libra Investments.
In the currency market, the dollar was softer after the Fed chief`s testimony, with its index measure against major peers dipping to its lowest in three weeks overnight. It last traded flat at 96.079.
The British pound vaulted after Prime Minister Theresa May offered lawmakers the chance to vote on delaying Brexit.
Sterling last traded at $1.3255, having risen to $1.3288 on Tuesday, its highest levels in five months. Against the euro, it hit a 21-month high of 0.8563.
Investors will be keeping an eye on the US-North Korean summit, scheduled to kickoff in Hanoi later on Wednesday.
US President Donald Trump and North Korean leader Kim Jong Un were due to meet for their second summit, betting that their personal relationship can break a stalemate over the North`s nuclear weapons and end more than 70 years of hostility.
Oil futures rose slightly on Tuesday after news that OPEC planned to continue production cuts despite Trump criticizing the producer group for rising crude prices a day earlier.
US crude futures stood at $56.02 per barrel, up 0.9 percent, in early Asian trade.