Asian stocks rose after US Federal Reserve Chair Janet Yellen said the central bank was on track to raise interest rates this year.
“Most FOMC [Federal Open Market Committee] participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter,” Yellen said during a speech on Thursday in Massachusetts. “But if the economy surprises us, our judgements about appropriate monetary policy will change.”
The MSCI Asia Pacific Index added 0.2 percent to 125.07 on Friday in Hong Kong, but fell 3.3 percent this week. The regional benchmark measure has fallen 14 percent since the end of June, on course for its worst quarter in four years, as the Fed prepares to raise rates with financial markets rattled by concern slowing Chinese growth.
“What we’ve heard from Janet Yellen has done a lot to settle the market,” Kerry Craig, a Melbourne-based global strategist at JPMorgan Asset management, told Bloomberg TV.
The Fed is “very willing to move on higher rates this year. Ultimately they know that is a good thing for the US economy and a good thing for markets,” he said.
Japan’s TOPIX added 1.9 percent as investors bought shares ahead of a deadline to ensure they received dividend payments. Stocks that pay out more of their income as dividends, including banks and insurance companies, were among the biggest gainers.
More than half of the 1,887 stocks in the TOPIX will trade ex-dividend tomorrow, data compiled by Bloomberg show. The group includes Toyota Motor Corp, Mitsubishi UFJ Financial Group Inc and Nippon Telegraph & Telephone Corp.
Japanese Prime Minister Shinzo Abe unveiled a new economic growth target on Thursday and vowed to halt the nation’s population slide. Abe laid out three new “arrows” of his Abenomics plan: a strong economy, increased support for families with children and social security.
The Bank of Japan’s inflation gauge dropped into negative territory, data showed on Friday, as weak domestic demand and plunging oil prices wiped out the impact of Governor Haruhiko Kuroda’s unprecedented monetary stimulus.
In Taipei, the TAIEX closed slightly higher on Friday as earlier gains were capped, although the central bank cut its key interest rates for the first time after a freeze for the past 16 quarters, to boost the local economy, dealers said.
The weighted index edged up 0.1 percent to 8,132.35 on Friday, but dropped 3.9 percent from the previous week’s 8,462.14.
The electronics sector moved higher on hopes that an interest rate cut would pump more funds into the equity market, while the financial sector trended lower amid fears that a narrowing interest spread caused by the rate cut would hurt financial institutions’ profitability, the dealers said.
“The rate cut only provided an initial boost to share prices, and then investors started to question the timing of the reduction, speculating that the local economy is worse than the market had expected, which triggered the central bank’s move,” MasterLink Securities (元富證券) analyst Tom Tang (湯忠謙) said.
In a quarterly policymaking meeting, the central bank trimmed its key interest rates by 0.125 percentage points, with the discount rate dropping to 1.75 percent, the rate of accommodations with collateral down to 2.125 percent, and the rate of accommodations without collateral reduced to 4 percent.
Hong Kong’s Hang Seng Index advanced 0.4 percent on Friday and the Hang Seng China Enterprises Index of mainland firms listed in the territory gained 0.5 percent.
The Shanghai Composite Index fell 1.6 percent on Friday after capital outflows hit a record and concern grew China’s economic slowdown was worsening and the government was scaling back support for equities.
Trading on China’s stock market is waning before a week-long holiday shutdown that starts on Oct. 1.
New Zealand’s S&P/NZX 50 Index gained 0.2 percent on Friday, while Australia’s S&P/ASX 200 Index slipped 0.6 percent, South Korea’s KOSPI dropped 0.2 percent and Singapore’s Straits Times Index slid 0.4 percent. India was closed for a holiday.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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