Rio Tinto will report its full-year results later in the day.
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The dollar sank against the yen to levels not seen since late 2014 after Yellen’s testimony to congress. She also warned that rising borrowing rates and a strong dollar could slow US growth and hiring, a reflection of the intensified turmoil that has gripped markets. Wall Street responded positively to Yellen’s testimony, but lost its gains later in the day.
At the same, Yellen’s comments are veiled enough to protect her against accusations that she is also an active combatant in the global currency wars, which has seen major central banks adopt increasingly aggressive monetary policies in the hope of driving their currencies lower and boosting export sales. Over the last three months, there’ve been 230,000 jobs per month averaging through.
South Korea re-opened from holiday with a 2.5 per cent drop as it caught up with losses elsewhere.
While testifying before the House Financial Services Committee on Wednesday, Federal Reserve Chair Janet Yellen noted that persistent economic headwinds have kept the federal funds target rate at a historically low level-and that future rate hikes may occur even more gradually than originally anticipated.
“Financial stocks in general are finding some support after the torrid start to the week, but this looks more like opportunistic bargain hunters dipping a toe in the water rather than a wholesale shift in sentiment”, said Tony Cross, analyst at Trustnet Direct.
That low marked a 7.7 percent drop in the dollar from a six-week high of 121.70 yen set on January 29, after the Bank of Japan stunned the markets by adopting a negative interest rate policy.
In Asia, the Hang Seng index (Hong Kong Stock Exchange:.HSI) in Hong Kong – which resumed trading after being closed for the Lunar New Year holiday – closed down 3.85 percent.
While European banks found a moment of stability, a renewed rush to the safety of longer-term US Treasury debt suggested the flight from risk was far from over.
However, Ms Yellen’s cautious assessment and emphasis on global risks marked a contrast to the more optimistic tone of her last public statement in December, when she hailed the Fed’s decision to lift short-term rates by a quarter-point as a sign of the progress that had been made by the United States economy since the Great Recession.
The Federal Reserve is unlikely to reverse its plan to raise interest rates further this year, but tighter credit markets, volatile financial markets, and uncertainty over Chinese economic growth have raised risks to the US economy, Fed Chair Janet Yellen told USA lawmakers on Wednesday. The dollar fell to 113.68 yen from 115.01 yen, while the euro rose to $1.1277 from $1.1287 the day before.
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Brent was up 79 USA cents, or 2.61 per cent, at $US31.11 a barrel, at 0752 Thursday AEDT.
