Asian shares rise after US Fed signals low rates will stay
TOKYO (AP) — Asian shares were higher Monday, as investors interpreted comments from the head of the U.S. Federal Reserve as signaling low interest rates were here to stay for some time.
Japan's benchmark Nikkei 225 edged up 0.4% in afternoon trading to 27,763.07. Australia's S&P/ASX 200 rose 0.2% to 7,500.80. South Korea's Kospi gained 0.2% to 3,140.96. Hong Kong's Hang Seng added 0.5% to 25,525.62, while the Shanghai Composite stood at 3,534.37, up 0.4%.
Regional investors are also looking ahead to data expected to be released Tuesday on China's manufacturing sector.
The rally in Asia paralleled the rise that ended the previous week on Wall Street, when the S&P 500 rose 39.37, or 0.9%, to 4,509.37 to top its prior all-time high set on Wednesday. The Dow Jones Industrial Average climbed 242.68 points, or 0.7%, to 34,455.80, and the Nasdaq composite gained 183.69, or 1.2%, to 15,129.50.
The speech by Fed Chair Jerome Powell was key, as U.S. stocks have set record after record this year, in large part because of the Fed's massive efforts to prop up the economy and financial markets. The gains had been getting increasingly tentative as markets began to look toward a possible end of the Fed’s assistance.
Last week, Powell noted past mistakes where policy makers made premature moves in the face of seemingly high inflation. He made clear a slowing of the Fed's bond purchases doesn't mean a rise in short-term rates is imminent. That would require the job market and inflation to hurdle “substantially more stringent” tests.
“We have much ground to cover to reach maximum employment," Powell said.
Stocks of U.S. companies whose profits are most closely tied to the economy made the biggest gains following the speech.
One problem Powell noted was the delta variant of the...
