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Asian stocks rebounded again on Wednesday, led by Japanese stocks, after the Bank of Japan’s deputy governor said he would not raise interest rates amid market instability, allaying investor concerns.
“The Bank of Japan needs to maintain monetary policy Shinichi Uchida said at a meeting with Japanese business leaders that “the current policy interest rate is temporarily loose, and the development of domestic and foreign markets is extremely unstable.”
His comments contrasted with hawkish comments from Bank of Japan Governor Kazuo Ueda last week, which led to widespread unwinding of yen carry trades.
Charu Chanana, head of FX strategy at Saxo Bank, said: “Uchida’s comments are likely to keep the yen and Japanese stocks stable around current levels, but the start of a new round of trading will be driven by increased volatility and concerns about the U.S. economy.” Carry trades remain challenging. “The risk-reward balance remains tilted towards further yen strength, the timing of which will depend on how the Fed cuts rates.”
Benchmark Nikkei 225 Index (New knowledge: IND)Finish up 1.2% after wednesday 10% gain Tuesday. Japanese yen (JPY:USD) lower More than 2% against the US dollar.
Rest of Asia: South Korea (KOSPI) +1.8%Hong Kong (Hang Seng Index) +1.2%India(SENSEX) +0.8%China (Shanghai Composite Index) +0.1%.
In the United States, Dow Jones Index Futures (INDU) +0.4%S&P Futures (SPX) +0.3%Nasdaq Futures (US100:IND) +0.3%.
