Asian Equities Rise After Powell Downplays Rate Hikes; Yen Resumes Losses

Asian equities rose after Federal Reserve chair Jerome Powell downplayed the prospect of further interest-rate hikes, leading to a positive market sentiment across the region. The yen resumed losses after a sudden jump late in the previous session, hinting at potential intervention from Japanese authorities.

Benchmark equity indexes in Australia and Hong Kong advanced, while Japan saw little change. Futures contracts for US shares also rallied, with investors now looking ahead to other potential catalysts such as Apple Inc.’s quarterly results and US payroll numbers.

The yen fell as much as 1.1% following its surge late Wednesday in New York. This renewed decline suggests skepticism among investors regarding Japan’s ability to prevent the currency from declining, given the wide interest-rate differential with the US. Japan’s top currency official remained tight-lipped when asked about potential intervention.

Federal Reserve’s decision to leave the target range for the benchmark federal funds rate unchanged at 5.25% to 5.5% was well-received by the market. Powell emphasized that the central bank’s next move is unlikely to be a rate hike, stating the need for persuasive evidence that policy isn’t tight enough to bring inflation back toward the 2% target.

The dollar index fell for a second day, reflecting the drop in US yields post the Fed’s decision. Treasuries remained stable in Asia, with the benchmark 10-year yield at 4.62%. Apple’s quarterly results and upcoming economic data releases are expected to provide further insights into the market’s direction.

In commodities, oil recovered from previous losses, while gold advanced as investors found comfort in the Fed’s signals of potential borrowing cost reductions. Overall, the market remains optimistic about the resilience of earnings and constructive equities outlook, particularly in the US.

Key events to watch this week include Eurozone manufacturing PMI, US factory orders, Apple earnings, Eurozone unemployment, US nonfarm payrolls, and ISM Services data. The market continues to closely monitor economic indicators and corporate earnings for further guidance on future investment decisions.