Asia stocks bounce, dollar dips on Fed hike doubts

While a drop in the yen following stronger-than-expected US consumer confidence data for August helped Japanese shares post strong gains, Australian shares led regional losses amid a sell-off in resource stocks.

The dollar hovered at a 2 1/2-week high against other top currencies ahead of USA trading as the overarching theme of interest rate moves helped Europe’s banking and industrial stocks push the FTSEurofirst 300 higher.

The FTSEuroFirst index of leading 300 shares was up 0.3 percent at 1,361 points .FTEU3 , and Germany’s DAX and Britain’s FTSE 100 were both down 0.1 percent .GDAXI .FTSE .

In Hong Kong, the Hang Seng was down 0.16%.

Along with weak household spending data on Tuesday, Japan’s latest gloomy data are reinforcing expectations the Bank of Japan will ease policy further in September even if many economists and businessmen think it won’t do much good. Industrial production was flat in July, defying forecasts for an increase, while a measure of housing starts rose more than expected in the last quarter, separate reports showed.

The broader Topix index of all first-section shares rose 0.84 percent, or 11.08 points, to 1,323.89.

But the dollar climbed back to levels around ¥102.20 later in the morning, supported by Japanese importers’ purchases and the Nikkei stock average’s upturn, they said. Yen bulls were also kept in check after Japan’s Chief Cabinet Secretary Yoshihide Suga told Reuters on Tuesday that the government will respond “appropriately” to unwelcome yen gains.

On Tuesday, Fischer spoke to Bloomberg TV, where he did not say when the Fed would raise rates, but instead reiterated the central bank’s data dependency on deciding when to hike interest rates, adding that the USA was very close to full employment.

The dollar index, which tracks the greenback against a basket of six major counterparts, edged down 0.1% to 95.937 and remained near its overnight top of 96.143, its highest since early August.

Sumitomo Chemical Co. advanced 2.3 percent. Atlas Iron soared 10 percent after narrowing its annual loss.

Benchmark 10-year U.S. Treasury yields were up 1 basis point at 1.58 percent, bringing the increase over August up to 12 basis points, the most since June last year. The euro was also unchanged at $ 1.1177.

Building materials supplier Adelaide Brighton tumbled 4.2 percent and live cattle exporter Wellard slumped 13.6 percent on disappointing financial results. Banks have been hurt by historically low interest rates, which makes lending less profitable. Stocks in South Korea .KS11 added 0.4 percent and Australia 0.3 percent. Trading in Hanjin Shipping shares was suspended as the troubled shipper made a decision to file for court protection after losing the support of its banks. Inpex Corp., which has a 87 percent weighting on a gauge tracking oil explorers, sank 3.1 percent, its biggest decline in a month.

Retirement village operators and developers posted broad-based gains, with Metlifecare, Summerset Group Holdings and Ryman Healthcare climbing 1-2 percent.

“The potential for the Fed to gradually lead global central banks out of the current stimulus phase is making investors wary about pushing stocks up to higher valuations”, Ric Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note. India’s Sensex was up 0.4 percent, extending gains for the third straight session. Shenzhen Composite, the tech focused index increased by 0.3 percent. In other energy trading, wholesale gasoline fell 5 cents to $1.47 a gallon, heating oil fell 1 cent to $1.49 a gallon and natural gas fell 2 cents to $2.85 per 1,000 cubic feet.