The MSCI Asia Pacific Index rose 0.1 per cent to 139.69 as of 9:10am in Tokyo.
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On Wall Street on Monday, S&P 500, Dow and Nasdaq stock indices all closed at lifetime highs, gaining 0.3/oz-0.6/oz.
European shares may retreat slightly from Monday’s seven-week high, with spreadbetters calling Britain’s FTSE 100 down 0.2 percent, Germany’s DAX down 0.1 percent, and France’s CAC down 0.3 percent.
Russian Energy Minister Alexander Novak said on Monday his country is consulting with Saudi Arabia and other producers to achieve oil market stability, bolstering hopes that oil producing nations could take action to stabilize prices.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.3 percent while Japan’s Nikkei .N225 rose 0.5 percent, paring some of Tuesday’s sharp losses. Since the start of August, it has risen more than 13 percent. “Today’s minutes of the Fed’s July policy meeting could be more hawkish than market expectations”, said Tomoaki Shishido, fixed income strategist at Nomura Securities. The dollar nudged up 0.2 percent to 100.530 yen after falling to 99.550 overnight, its lowest since June 24, when post-Brexit referendum turmoil had boosted the safe-haven yen.
New York Fed President William Dudley said that as the USA labour market tightens and as evidence of rising wages builds, “we’re edging closer towards the point in time where it will be appropriate I think to raise interest rates further”. “So markets will be keen to see what discussion they had on future rate hikes”, Sumitomo Mitsui Asset Management senior strategist Masahiro Ichikawa said. While the odds the Fed will raise rates in December climbed to 51 per cent yesterday, from 45 per cent the previous day, traders are betting there’s only a 22 per cent chance of tightening next month, data compiled by Bloomberg showed.
Reduced expectations for Fed policy moves also hurt the U.S. dollar, which has fallen against a basket of currencies in four of the last five trading sessions.
The dollar’s index against a basket of six major currencies plunged to 94.426 its lowest level since late June before paring some of losses to stand at 94.844, still down 0.9 per cent on the week.
Energy plays across the region traded higher, with Santos up 1.12 percent, Oil Search gaining 2.37 percent and Woodside Petroleum up 1.65 percent.
The yen weakened only moderately against the dollar during Asian trade Wednesday, as jawboning by Tokyo’s top currency bureaucrat failed to bring the Japanese currency back to the level before heavy yen buying kicked in just a day ago.
The British pound slipped to near its three-decade low marked in July as traders brace for the first round of hard United Kingdom economic data on consumer and corporate reaction to June’s vote for Britain to leave the EU. Currency markets will seek fresh direction from comments expected from St. Louis Fed President James Bullard and the release of the Fed’s July policy meeting minutes later in the session.
“The market is so bearish on sterling that if we see higher figures than expected, we could see a big short-cover rally in the pound”, said Bart Wakabayashi, head of Hong Kong FX sales at State Street Global Markets.
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A subdued second-quarter economic reading in Japan left the Nikkei down 0.3 per cent and suggested the Bank of Japan could again ease monetary policy soon.
