Asian shares rise after Fed says economic aid will wind down

·1 min read

ASIAN shares rose Thursday, Nov. 4, 2021 boosted by the announcement from the US Federal Reserve on winding down the extraordinary aid for the economy it had been providing since the early days of the pandemic.

Japan’s benchmark Nikkei 225 gained nearly one percent in early trading to 29,809.67. South Korea’s Kospi added one percent to 3,005.11. Australia’s S&P/ASX 200 edged up 0.2 percent to 7,405.20. Hong Kong’s Hang Seng added 0.4 percent to 25,131.16, while the Shanghai Composite rose 0.3 percent to 3,509.13.

Analysts said the signs from the Fed continued to be dovish, as well as hawkish, reassuring global markets that interest rates weren’t going to be raised for some time.

“We got a ‘dowkish’ Fed move,” was the way RaboResearch characterized the message.

But long-term worries about Asian economies remain because of concerns there may be a sixth wave of coronavirus infections, despite growing signs of a return to normal economic activity and a freer flow of people traveling in some nations.

Eyes also remain on earnings reports expected from an array of companies in Asia, including Japanese automakers and technology companies.

In a statement released at 2 p.m. Eastern, the Fed said it will begin reducing its US$120 billion in monthly bond purchases in the coming weeks by $15 billion a month.

If that pace is maintained, the Fed could be done winding down its bond purchases as early as June. At that point, the Fed could decide to begin raising its key short-term interest rate, which affects many consumer and business loans. (AP)

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