Asian Stocks Higher as Fed, Bank of Japan in Focus

The Federal Reserve has scheduled an FOMC meeting on Tuesday and Wednesday to make a crucial decision over the monetary policy.

US stocks cut early gains to end flat, with a rise in big bank stocks offsetting a drag from Apple (AAPL.O). Japan’s central bank meets on Wednesday. The Dow rose as much as 131 points in morning trading and fell as much as 30 points in the afternoon.

US stocks are making solid gains in Monday morning trading as machinery and technology companies move higher. Treasury bonds were little changed, the dollar was weaker, gold gained 0.6% and the crude oil price gained 0.6%. Economists surveyed by Bloomberg expect the Fed to keep rates unchanged, while strengthening guidance about its intentions to raise borrowing costs soon. The central bank could deepen negative interest rates that it announced earlier this year.

“We look for the BOJ to take a more flexible stance on the time horizon for reaching its price stability target and on the pace of its JGB purchases, but expect it to refrain from further easing at this meeting”, strategists at Barclays said. “One of the questions.is not only what will they do, but what would the market like to see?”

In China, the Shanghai Composite Index declined 0.28%, while Hong Kong’s Hang Seng Index fell 0.35%. Tech Data says the deal will give it operations in 35 countries. Its stock rose $15, or 21.6 percent, to $84.34 and Avnet gained $3.47, or 8.8 percent, to $42.68. This has driven United States 10-year real yields back up to a pre-Brexit high of 0.20 percent.

Benchmark US crude added 27 cents to 43.30 US dollars a barrel in NY. Brent crude, used to price global oils, rose 55 cents to $46.33 per barrel. Silver added 43 cents, or 2.3 percent, to $19.29 an ounce.

Shares (Berlin: DI6.BE – news) in French gas group Engie (LSE: 0LD0.L – news) rose 1.25 percent to 13.75 euros despite the European Union launching a probe into alleged sweetheart tax deals between Engie and Luxembourg.

Eight of the 11 major S&P 500 indexes were higher, with the materials sector rising the most by 0.72 percent.

Low rates tend to push up share prices as the returns available from stocks are then more attractive. Trading volume was light amid a market holiday in Japan and a dearth of US economic data.

Spot gold was up 0.6 per cent at $1,317.66 an ounce by 0729 GMT, having hit a low of $1,306.26 on Friday, the weakest since September 1.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent, after major USA indexes ended a choppy session almost flat.

UK’s benchmark FTSE 100 closed up by 1.5 percent, the pan-European FTSEurofirst 300 ended the day up by 1.02 percent, Germany’s Dax ended up by 1 percent, France’s CAC finished the day up by 1.5 percent.

South Korea’s Kospi index fell 0.2 percent. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.