Asian Shares Mostly Higher After U.S. Fed Hints At Low Rates

Asian shares were mostly higher Monday, August 30, 2021, as investors interpreted comments from the head of the US Federal Reserve as signaling low interest rates were here to stay for some time, Yuri Kageyama reported for the Associated Press (AP).

Photo Insert: Asian shares piggybacked off of the seemingly positive comments on low interest rates.

Japan’s benchmark Nikkei 225 edged up 0.2% in morning trading to 27,686.18. Australia’s S&P/ASX 200 rose nearly 0.1% to 7,494.10. South Korea’s Kospi was virtually unchanged at 3,133.72. Hong Kong’s Hang Seng declined 0.3% to 25,344.79, while the Shanghai Composite stood at 3,535.19, up 0.4%.

The rally in Asia paralleled the rise that ended the previous week on Wall Street, when the S&P 500 rose 39.37, or 0.9%, to 4,509.37 to top its prior all-time high set on Wednesday.

The Dow Jones Industrial Average climbed 242.68 points, or 0.7%, to 34,455.80, and the Nasdaq composite gained 183.69, or 1.2%, to 15,129.50.

The speech by Fed Chair Jerome Powell was key, as US stocks have set record after record this year, in large part because of the Fed’s massive efforts to prop up the economy and financial markets.

The gains had been getting increasingly tentative as markets began to look toward a possible end of the Fed’s assistance. Last week, Powell noted past mistakes where policymakers made premature moves in the face of seemingly high inflation.

He made clear a slowing of the Fed’s bond purchases doesn’t mean a rise in short-term rates is imminent. That would require the job market and inflation to hurdle “substantially more stringent” tests.

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