Global stocks rise after Fed holds off interest rate hike

Asian stock markets held fairly steady Friday, holding on to gains in the week driven by US and Japanese central bank policy decisions that fueled investors’ belief that low rates will be around for a few more months. On Wall Street, the futures for the Dow Jones industrial average and the Standard & Poor’s 500 were both up 0.3 percent.

Malaysian shares ended 0.7% higher, while Vietnam gained about 0.4%. Hong Kong’s Hang Seng .HSI climbed 0.4 percent. It expects the economy to expand just 1.8 percent this year and by an nearly equally sluggish two percent in both 2017 and 2018.

While Tokyo is on holiday on Thursday, stocks .N225 closed up 1.9 percent on Wednesday after the BOJ’s shift to targeting a positive yield curve, a move that was considered bullish for banks, insurers and pension funds. Brent crude futures LCOc1 rose 0.8 percent to $47.21, adding to gains of 2 percent on Wednesday. Benchmarks in Taiwan, New Zealand and Indonesia also rose, while Singapore declined.

FED WATCH: The Federal Reserve kept its key interest rate unchanged and signaled it is likely to raise it later this year.

Now as that realization sinks in, are “central banks willing to continue easing?”

The Fed kept its benchmark interest rate unchanged for the sixth straight meeting, saying it needs to see a bit more sign of strength in the US economy.

“It appears hard for the dollar-yen rate to show a clear direction as market participants remain divided in their assessments of the new monetary policy framework announced by the Bank of Japan (on Wednesday)”, an official of a major Japanese bank said.

Fed chairwoman Janet Yellen said she expects one rate increase in 2016 as such increases are required to keep the economy from overheating and to avoid high inflation.

“Whether sterling can now hold above this level is very much open to question, as the meeting minutes showed most policymakers still see interest rates rising before the year end”, said Chris Saint, senior analyst at Hagreaves Lansdown currency service.

The Fed also projected a less aggressive rise in rates next year and in 2018, fanning expectations bond yields will remain low for the foreseeable future.

Oil prices added as much as 3 percent on Wednesday after a third surprise weekly drop in US crude stockpiles boosted the demand outlook in the world’s largest oil consumer.

Asian shares held near 14-month highs, while Japanese bond yields fell as investors continued to debate the Bank of Japan’s new policy scheme, which will seek to keep longer-dated yields around zero. US benchmark crude was up $1.11 to $46.45 a barrel, while Brent crude, used to price worldwide oils, rose 85 cents to $47.68 a barrel.

Wednesday’s announcements helped soothe recent investor concerns that the age of cheap cash – which has supported markets for years – could be coming to an end, fueling talk of an equity correction.

DUBLIN The Iseq index climbed 1 per cent, as equities rose across Europe.

US stocks were broadly higher Thursday, helped by a rise in prices for crude oil and other commodities.

The Fed news has meanwhile sent the USA dollar sliding against the European single currency. It gained 95 cents the previous session to $46.83.