HONG KONG (AFP) – Asian markets mostly rose Thursday following an upswing on Wall Street as minutes from the Federal Reserve’s latest meeting indicated policymakers were nervous about hiking interest rates too soon.
The minutes show the central bank board aired worries about the stronger dollar, a stumbling eurozone economy, slowing growth in China and Japan and geopolitical risks.
The news also sent the euro and yen up against the greenback as dealers contemplated several more months of record-low rates.
Sydney rallied 1.06 per cent, or 55.43 points, to close at 5,296.7 and Shanghai gained 0.28 per cent, or 6.58 points, to 2,389.37 while Hong Kong jumped 1.17 per cent, or 271.20 points, to 23,534.53.
However, Tokyo, which rallied in morning trade, slipped 0.75 per cent, or 117.05 points, to 15,478.93 owing to the yen’s strength.
Seoul was closed for a public holiday.
Minutes of the Federal Open Market Committee meeting showed that despite strong domestic data, members debated changing their signal on the timing of a rate hike owing to problems overseas.
“Some participants expressed concern that the persistent shortfall of economic growth and inflation in the euro area could lead to a further appreciation of the dollar and have adverse effects on the US external sector,” the minutes said.
“Several” of them added “that slower economic growth in China or Japan or unanticipated events in the Middle East or Ukraine might pose a similar risk.”
The post-meeting statement said it would wait for some “considerable time” before lifting rates but according to the minutes there were fears that the reference “could be misunderstood as a commitment rather than as data dependent”.
Michael James, managing director of equity trading at Wedbush Securities, said: “Traders’ interpretation was that rates are not going to be going up that much or as quickly as maybe people are fearing.”
The news pushed US shares surging, with the Dow up 1.62 per cent, the S&P 500 jumping 1.73 per cent and the Nasdaq climbing 1.90 per cent.
A string of impressive US data in recent months has fuelled speculation the Fed will likely announce a rise before a mid-2015 timetable.
This has sent the dollar to multi-year highs against major currencies while also hitting Asian equities as traders take their cash back to the United States for better investment returns.
But in currency dealing Thursday the yen and euro made inroads against the greenback.
In New York the euro climbed to $1.2734 from $1.2667.
And in Asian trade Thursday the single currency – which sank to a two-year low of $1.2500 last week as the eurozone economy struggles – was at $1.2773. It also fetched 137.61 yen compared with 137.71 yen.
The dollar was at 107.73 yen against 108.14 yen in New York Wednesday. The greenback is sharply down from the six-year highs above 110 yen seen late last week.
Oil prices rebounded after a recent sell-off. US benchmark West Texas Intermediate (WTI) for November delivery was up 40 cents at $87.71 a barrel in afternoon trade after hitting an 18-month low in New York on Wednesday.
Brent crude for November advanced 23 cents to $91.61 after tumbling to a two-year low the day before.
Gold was at $1,227.95 an ounce against $1,217.96 late Wednesday.