By Chao Deng
The yen weakens against the dollar
Stocks in Japan and Australia led Asia higher for a second day
on Friday, as investor confidence continued to be bolstered by
expectations the U.S. is in no rush to raise interest rates.
Buying was returning to the region despite a further slide in
oil prices overnight. The Nikkei Stock Average was up 1.8%, while
Australia's S&P/ASX 200 gained 2.0%. Stocks were extending
gains from yesterday, after the U.S. central bank signaled
Wednesday that it would be "patient" in raising interest rates.
When it does eventually lift rates, such a move could sap money
flows away from riskier markets and into U.S. bonds.
Japan and Australia are outperforming the Asia-Pacific region
this week. However, benchmarks in Asian emerging markets--Vietnam
and the Philippines in particular--have been battered by a
combination of concerns that include declining oil prices, the
prospect of eventually tighter monetary policy in the U.S., and a
bout of volatility in the region's currencies. Those worries were
on display during an emerging market selloff earlier in the
week.
On Thursday, oil was down 4.2%, to settle at $54.11 a barrel, on
the New York Mercantile Exchange, its lowest level in more than
five years. Prices were last up at $54.62 a barrel. But most
countries in Asia are net oil importers so lower oil prices are a
welcome sign. In Australia, where big resources firms trade,
investor focus on latest indications from the U.S. Fed appeared to
overshadow concerns in the commodities market for now.
Elsewhere, the Hang Seng Index was up 1.4% and the Shanghai
Composite Index was up 0.5%.
Stocks in the mainland have been largely shielded from the
worries abroad, rallying 23% since China's central bank surprised
markets in November with an interest-rate cut, including a
week-to-date gain of 4.6%.
The region was tracking the U.S., where the Dow Jones Industrial
Average (DJI) vaulted to its biggest two-day gain in more than
three years Thursday.
The U.S. dollar rose to Yen119.09 from Yen118.83 late Thursday
in New York. Rising interest rates draw investors looking for
bigger returns into dollar-denominated bonds, and a stronger dollar
is often a boon for Japanese exporters who repatriate dollar
earnings from overseas to home.
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