HONG KONG: Asian markets were mostly lower on Wednesday, with focus on the US Federal Reserve’s policy meeting later in the trading day, but Tokyo enjoyed another rally as data showed a surge in exports, thanks to a weaker yen.
Wall Street again provided a healthy cue, with investors betting the Fed will stop short of reeling in its “quantitative easing” (QE) bond-buying program.
Tokyo added 1.83 percent, or 237.94 points to 13,245.22, and Sydney was 0.98 percent higher, climbing 47.0 points to 4,861.4. Seoul lost 0.65 percent, or 12.31 points to 1,888.31.
Shanghai lost 0.73 percent, or 15.84 points to close at 2,143.45, and Hong Kong slipped 1.13 percent, or 238.99 points at 20,986.89.
The US central bank’s policy board will announce its decision on QE later on Wednesday, with traders hoping that it will stick to the $85-billion-a-month buying program, which has sent markets soaring since being unveiled in September.
Global equities and currencies have been sent into turmoil in recent weeks on expectations that Fed chief Ben Bernanke will start turning off the tap.
However, IG strategist Stan Shamu told Dow Jones Newswires: “Based on the recent US economic data, Bernanke will probably say that little has changed since last month and that the Fed is happy to continue its quantitative easing.”
The market is now betting the Fed will pull back only in “the distant horizon,” said Art Hogan of Lazard Capital Markets.
Bernanke’s message will be that “things are getting better, but not enough so that we’re going to start tapering.”
On Wall Street, the Dow climbed 0.91 percent, the S&P 500 jumped 0.78 percent, and the Nasdaq was 0.87 percent higher.
Investors in Tokyo welcomed figures showing a 10.1-percent year-on-year rise in exports for May, as the weaker yen makes Japanese firms’ goods more attractive overseas.
The news comes soon after revised data showed that the economy expanded at a faster rate than initially thought in the January to March quarter, adding to improving confidence in the outlook.
While Wednesday’s results also showed imports surging 10.1 percent, they indicate Prime Minister Shinzo Abe’s big-spending plan to boost the economy is having an effect.
“It is not just the weaker yen increasing the value of exports, the amount of exports is increasing as well,” Junko Nishioka, chief economist at RBS Securities Japan, told Dow Jones Newswires.