HONG KONG: Asian markets rose on Tuesday as unexpectedly weak data out of the United States increased the likelihood that the Federal Reserve would keep its stimulus program in place for some time.
The upbeat outlook helped Japanese stocks post healthy gains despite the dollar dipping against the yen. Tokyo rose 0.98 percent, Hong Kong added 1.77 percent, Sydney gained 0.34 percent, Shanghai was up 0.24 percent and Seoul climbed 0.83 percent.
With few catalysts to drive action, hopes that the Fed would hold off winding down its bond-buying were taken as a positive, despite a soft lead from Wall Street.
The National Association of Realtors said that home sales fell 1.2 percent to an annual rate of 5.08 million in June, from a downwardly revised 5.15 million in May. The average analyst estimate was for a rise to a 5.28-million pace in June.
Global markets steadied last week after Fed boss Ben Bernanke said that the easy money policy would be kept in place for as long as needed until the economy was up to speed. Markets have been in turmoil for weeks prior as dealers bet on an end to the scheme in the near future.
“Investors appear to be adjusting for a view that markets have overshot on the timing and impact of Fed monetary tightening,” CMC Markets chief market analyst Ric Spooner told Dow Jones Newswires.
“Economic growth will need to pick up from current levels for markets to bring forward current expectations of any actual increase in US interest rates from late 2014 at the earliest,” he added.
While a positive for equities traders, gains in Wall Street’s three main indices were capped by disappointing corporate results, including from market giant McDonald’s.
The Dow was flat, the S&P 500 rose 0.20 percent and the Nasdaq added 0.36 percent.
However, expectations that US stimulus would remain in place sent the dollar down to 99.59 yen in New York City from 100 yen in Tokyo earlier in the day.
In early trade on Tuesday, the greenback bought 99.54 yen while the euro fetched 131.35 yen and $1.3193, compared with 131.33 yen and $1.3186 in New York City on Monday.