The Financial Express

Asia shares up as North Korea tensions ease, wary Fed weighs on dollar

| Updated: October 24, 2017 13:37:39

Lankabangla and Fianancial Express Lankabangla and Fianancial Express
People walk past an electronic board showing Japan's Nikkei average outside a brokerage at a business district in Tokyo, Japan August 9, 2017. Reuters People walk past an electronic board showing Japan's Nikkei average outside a brokerage at a business district in Tokyo, Japan August 9, 2017. Reuters

Asian stocks edged higher on Thursday as tensions between the United States and North Korea came off the boil, while the Federal Reserve's concerns about weak US inflation weighed on the dollar.


MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.5 per cent.


Japan's Nikkei .N225 slipped 0.1 per cent, weighed down by a stronger yen as the dollar wilted and shrugging off data showing the country's exports rose for an eighth straight month in July.


Australian shares gained 0.1 per cent and the Australian dollar AUD= inched up 0.1 per cent to $0.7931 after the country added 27,900 jobs in July, beating expectations for an increase of 20,000.


The unemployment rate remained at 5.6 per cent, as expected, although full-time employment fell by 20,300.


South Korean shares .KS11 advanced 0.5 per cent after the leaders of both North Korea and the United States appeared to back off from their heated rhetoric from last week.


Trump on Wednesday praised North Korean leader Kim Jong Un for a "wise" decision not to fire missiles towards the US Pacific territory of Guam, after North Korean media reported that Kim had delayed to decision while he waited to see what the US did next.


While that helped Wall Street close in positive territory overnight, concerns on the home front sent the dollar into reverse.


Trump announced the disbanding of two high-profile business advisory councils on Wednesday after eight executives quit in protest over his remarks blaming weekend violence in Virginia not only on white nationalists but also on anti-racism activists who opposed them.


Moreover, minutes from the Fed's July meeting released on Wednesday showed the central bank grew more wary about recent weak inflation, with some policymakers wanting to halt interest rate hikes until it was clear the trend was temporary.


Money market futures FFF8 are now pricing in about a 40 per cent chance the Fed will raise rates by December, compared to just under 50 per cent before the Fed's minutes.


"The Federal Open Market Committee minutes confirmed one thing, which is that the committee members are not on the same page and there is no clear date when the Fed will initiate the process of reducing the size of the balance sheet," Naeem Aslam, chief market analyst at Think Markets in London, wrote in a note.


"Trump dissolving his major business groups makes the investment community even more pessimistic because this sets the stage for even more failure for him."


The dollar fell 0.3 per cent to 109.79 yen JPY=D4, extending Wednesday's 0.4 per cent slide.


The dollar index .DXY, which tracks the greenback against a basket of six major peers, dropped 0.2 per cent to 93.357 after Wednesday's 0.3 per cent loss.


The euro EUR=EBS rose 0.1 per cent to $1.17835, extending its 0.3 per cent gain overnight, after the euro zone's second-quarter growth was revised to 2.2 per cent from a year earlier, from 2.1 per cent previously.


Bitcoin BTC=BTSP, which has surged over $1,500 this month on speculative demand for the digital currency, slipped slightly.


It fell about 1.5 per cent to $4,308.48, but remained within a whisker of its all-time high of $4,400 touched earlier this week.


In commodities, oil prices edged up but remained close to a 3-1/2 week low touched on Wednesday as rising US production offset a decline in stockpiles by the most in a year.


US crude CLc1 was about 0.2 per cent higher at $46.88 a barrel, failing to make up most of Wednesday's 1.6 per cent slide.


Global benchmark Brent LCOc1 gained 0.4 per cent to $50.47, after the previous session's 1 per cent drop.


Industrial metals held gains following their surge overnight, underpinned by expectations of strong global demand and tight supplies.


Benchmark zinc on the London Metal Exchange CMZN3 set a new decade high of $3,145 a tonne on Thursday, and was last up 0.2 per cent from its previous close at $3,126.


London copper CMCU3 gained 0.2 per cent to $6,545 a tonne, after hitting $6,580, its highest level since November 2014, earlier in the session.


Gold XAU= advanced 0.4 per cent to $1,287.51 an ounce, adding to Wednesday's 0.9 per cent jump.


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