Asia stocks rise as Fed tamps down hike fear

Asia stocks rise as Fed tamps down hike fear

Asian stocks and U.S. futures rose on Thursday after the Federal Reserve downplayed risks of an interest rate hike, while the yen was bumpy after another burst of suspected intervention from Japan.

Shortly after Fed Chair Jerome Powell had finished telling reporters the Fed may have to leave rates elevated, the yen surged against the dollar.

It was the second sudden leap in the ailing Japanese currency this week and markets suspect it was authorities stepping in as yen-buyers. The yen traded as strong as 153 to the dollar before sliding back to around 156 in Asia.

European futures were mixed, with EUROSTOXX 50 futures down 0.2% while FTSE futures added 0.4%.
S&P 500 futures rose 0.5%, pointing to the cash market recouping a late slide on Wall Street.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.7%, led by a 2% surge in Hong Kong.
Tokyo’s Nikkei (.N225) was little changed.

Oil was nursing a heavy fall on demand worries and a surprise jump in U.S. stockpiles. Brent crude futures were up 54 cents a barrel to $83.98, after touching a seven-week low of $83.29 on Thursday. U.S. crude was at $79.52 a barrel

The Fed had left interest rates on hold and Powell told reporters that inflation was too high and progress in bringing it down was uncertain. But he did not entertain growing speculation the Fed may need to hike rates.

“There are paths to not cutting and there are paths to cutting. It’s really going to depend on the data,” he said, which traders interpreted as all but ruling out a rate hike.

“The key takeaway is the Fed still thinks it’s much more likely the next move is a cut, than a hike, and the door is very much open,” said Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney.

Treasuries rallied, pushing yields lower, as the Fed also said it would slow its balance-sheet runoff. However in Asia some of that move was unwound. Ten-year Treasury yields rose 2.3 basis points to 4.614% in Tokyo, having fallen 9.3 basis points in New York on Thursday.
Two-year year yields , which fell more than 10 bps in New York overnight, rose 1 bp to 4.9497%.
After pricing in as many as six rate cuts for 2024 earlier this year, markets now price only one, in December

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