Traders expected stocks to at least match the 1.1 percent gain enjoyed by the S&P 500.SPX.
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The Hang Seng index rose 0.6 percent to 23,669.90 points, while the China Enterprises Index gained 1.0 percent to 9,849.06.
Another central bank struggling with too-low inflation is the Reserve Bank of New Zealand, which held rates steady on Thursday but renewed a pledge to cut again even as much of the domestic economy grows briskly.
Yellen defended that view by pointing out that despite the robust job growth in recent months, a number of measures in the labor market haven’t improved.
The Fed was the next central bank in the frame, releasing its decision after the European markets closed on Wednesday. Eastern news conference was digested.
Once the next Fed rate hike occurs, we may start seeing some upward movement in deposit rates, but I doubt we’ll see much movement until we see regular Fed rate hikes.
It added that its rate-setting committee had decided against raising rates “for the time being”, until there was more evidence of progress towards its employment and inflation objectives. Prices for fed funds futures contracts suggested investors continued to see just better-than-even odds of a hike at the December policy meeting, and nearly no chance of an increase in November.
“No news is good news for markets today”, Hooper said. Well, we certainly have a number of answers and if we assess price action it seems that many are now happy to invest in Japanese banks and while the Fed have given as strong a signal of a hike in the December meeting, United States stocks still soared. The overall consensus among economists is for a move in December, according to a Reuters poll. “We still believe a rate hike is unwise but [it] will have less of an adverse effect in credit and equity markets.”, he said in a note.
While Tokyo was on holiday on Thursday, stocks.N225 were boosted on Wednesday by the Bank of Japan’s shift to targetting a positive yield curve, a move that was considered bullish for banks, insurers and pension funds. “The interest rate path for the coming years, however, was lowered further”, said Harm Bandholz of UniCredit.
The Fed kept its target rate for overnight lending between banks in a range of 0.25 percent to 0.50 percent, where it has been since it hiked rates in December for the first time in almost a decade.
Under its new framework, the BOJ will buy long-term government bonds as necessary to keep 10-year bond yields at current levels of around zero percent.
The Australian sharemarket is expected to mirror the overnight rally on Wall Street.
Spot gold was up 1.2 per cent at $US1,330.08 an ounce by 1858 GMT (0458 AEST), after rising to $US1,335.01 an ounce, the highest since September 9. WTI crude futures added 3.5% on hopes that major oil producers could be nearing agreement on a deal to cap output. “Fundamentally, it did not amount to an easing of monetary policy, but merely offers policy tweaks at the margin and a strengthening of forward guidance”, said Frederic Neumann, co-head of economic research at HSBC.”The BOJ now essentially promises to purchase JGBs for even longer, until inflation exceeds, and not merely meets, its 2 percent inflation target”.
Meanwhile the Bank of Japan made only modest changes to monetary policy last night.
The tinkering with policy highlights the limits of the central bank’s options but may alleviate concern the BoJ is “crowding out” other investors with its massive purchases of government bonds.
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The Japanese yen initially sold off after the announcement, but has since rebounded. “Japan needed a Fed hike in order to push the yen down”.
