By Daniel Inman
Japanese and Australian stocks rose Thursday, with the Nikkei
Stock Average closing at a four-month high, as investors took
comfort in the U.S. Federal Reserve's stated commitment to low
interest rates.
The Nikkei Average shrugged off gains by the yen, typically a
headwind for stocks in Tokyo, and gained 1.6% at 15,361.16 -- the
highest close since Jan. 29.
"The Fed didn't say much that the market hadn't already
perceived; hence U.S. stocks' generally positive reaction
overnight," said Nicholas Smith, equity strategist at CLSA. "More
interesting is the fact of Japan shares' divergence from the
dollar-yen market gyrations."
On Wall Street, the S&P 500 (SPX) closed at a record
Wednesday after Fed Chairwoman Janet Yellen gave a relatively
upbeat assessment of the U.S. economy. Speaking after the central
bank's latest policy meeting, Yellen said that interest rates would
stay low for a relatively long period.
The dollar (DXY) fell against major currencies, as investors who
had expected the Fed to shift to an accelerated schedule for the
increase in interest rates were disappointed. The dollar (USDJPY)
weakened 0.2% against the yen on Wednesday, and declined further
during Asian trade Thursday. It was last at Yen101.75, compared
with Yen101.92 late Wednesday in New York.
In Tokyo, shares in Sharp Corp. (SHCAF) jumped 3.5% after the
company announced that it had developed an LCD panel that can be
cut into any shape, meaning it could be useful in a wide range of
applications. Also in Japan, shares in Nippon Sheet Glass surged
16.9% after Nomura Securities upgraded the company to buy from
neutral.
Also supporting regional sentiment in Asia were comments from
Chinese Premier Li Keqiang, who said the Chinese economy would
avoid a hard landing and hit the government's 7.5% growth target
this year. This helped commodity-related stocks, especially in
Australia, where strong gains in mining shares helped push the
S&P/ASX 200 up 1.6% to 5,468.20.
Spot iron-ore prices rose 1% to $90.30, helping BHP Billiton
(BHP) and Fortescue Metals Group (FSUMY) gain 3.3% and 5%,
respectively.
In China, however, stocks fell sharply. Li's comments dashed
hopes among investors that Beijing would implement more stimulus in
the short term. Selling in small-cap stocks also weighed on the
market, as liquidity was diverted to initial public offerings, with
sharp falls on the startup board in Shenzhen.
"There are some concerns about insufficient liquidity following
the new IPOs, but this likely a temporary fall," Capital Securities
analyst Amy Lin said.
The Shanghai Composite lost 1.6% to 2,023.73, while Shenzhen's
ChiNext fell 3.2% to 1,320.66.
Elsewhere in Asia, South Korea's Kospi was up 0.1% to 1,992.03,
Hong Kong's Hang Seng Index was flat at 23,167.73, and Singapore's
Straits Times Index was down 0.2% in late trade.
More MarketWatch news:
Asia Stocks blog: Japan gets post-Fed boost
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China premier vows no hard landing for economy
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