SINGAPORE: Asian stocks and US futures surged on Thursday after the Federal Reserve eased concerns over an interest rate hike, while the yen remained volatile following suspected intervention from Japan.
Shortly after Fed Chair Jerome Powell addressed reporters, suggesting the Fed might maintain elevated rates, the yen sharply strengthened against the dollar.
This marked the second sudden surge in the struggling Japanese currency this week, with markets speculating on authorities' intervention as yen-buyers. The yen initially strengthened to 153 against the dollar before easing back to around 156 in Asia.
European futures showed mixed trends, with EUROSTOXX 50 futures down 0.2 per cent, while FTSE futures gained 0.4 per cent.
S&P 500 futures climbed 0.5 per cent, indicating a rebound in the cash market after a late dip on Wall Street. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent, driven by a 2 per cent jump in Hong Kong.
Tokyo's Nikkei remained largely unchanged.
Oil prices experienced a significant drop due to demand concerns and an unexpected rise in U.S. stockpiles. Brent crude futures increased by 54 cents to $83.98 a barrel, rebounding from a seven-week low of $83.29 on Thursday. U.S. crude stood at $79.52 a barrel.
Despite leaving interest rates unchanged, Powell highlighted concerns about high inflation and uncertainty regarding progress in reducing it. However, he downplayed speculation about a potential rate hike.
Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney, emphasized the Fed's view that a rate cut is more likely than a hike.
In the foreign exchange market, attention remained on the yen's movements. After its surge in late New York trade, the yen retraced most of its gains during the Asia session. The yen has been on a downward trend due to rising global interest rates contrasting with Japan's ultra-low rates.
The dollar strengthened by about 0.8 per cent to 155.80 yen, while the euro rose by 0.9 per cent to 167.00 yen. The Aussie dollar traded near 102 yen. Tokyo money market data suggested that Japanese authorities may have spent nearly $35 billion buying the yen on Monday, shortly after it reached 160 per dollar, its lowest level in over three decades.
Hirofumi Suzuki, chief FX strategist at SMBC in Tokyo, emphasized the persistent pressure on the yen to weaken in the medium to long term, regardless of FX intervention.
In corporate news, chipmaker Qualcomm exceeded market expectations for sales and profit, leading to a 4 per cent increase in its shares during after-hours trading.
Later on Thursday, focus will shift to Apple's results, with markets anticipating a significant drop in sales and awaiting news on the company's plans for AI in iPhones.
Outside the oil market, trading in other commodities was subdued due to holidays in China, where markets are closed for the rest of the week. Gold prices rose overnight and remained steady at $2,314.44 in Asia trade.__Reuters.
Oman Observer is now on the WhatsApp channel. Click here
