SHANGHAI, Aug 27 2018 : Asian shares rose early today, taking support from Wall Street’s gains on Friday after U.S. Federal Reserve Chairman Jerome Powell said a gradual approach to raising rates was best to protect the U.S. economy and job growth.
Powell’s comments, which were in line with market expectations, helped to push the S&P500 index .SPX and Nasdaq Composite .IXIC to record highs on Friday, cementing the S&P’s longest-running bull market, as defined by some investors.
“Powell’s Jackson Hole speech essentially confirmed the need for further gradual rate hikes and stressed that higher interest rates have served the economy well. However, rate rises remain data-dependent, and other Fed officials reiterated that ‘nothing is predetermined’,” ANZ analysts said in a note today.
“The Fed Chair’s reiteration that rate rises would remain gradual gave the green light to ongoing falls in the USD and increases in equities on Friday.”
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, while Japan’s Nikkei stock index .N225 gained 0.6 percent.
Seoul’s Kospi index .KS11 was flat.
Australian shares were up 0.1 percent, following a week of political tumult that saw the Scott Morrison become the country’s sixth prime minister in less than 10 years.
The dollar index, which tracks the greenback against a basket of six major rivals, was down 0.1 percent at 95.070.
The United States has pulled out of a nuclear accord it signed with Iran in 2015 and has imposed sanctions on Iran’s oil industry and exports.
Gold was slightly higher as the dollar weakened. Spot gold gained 0.1 percent to trade at $1206.66 per ounce. – Reuters