Asian Stocks Edge Higher as Traders Wait for Fed, BOJ Policy

Updated on
  • Japan’s Topix rises for second day as it reopens after holiday
  • Philippine shares lead region on signs locals bargain-hunting

The Fed and BOJ Ripple Effect on Emerging Markets

Asian stocks rose for a third day in light trading as investors waited for policy decisions from the Federal Reserve and the Bank of Japan.

The MSCI Asia Pacific Index climbed 0.3 percent to 138.71 as of 4:01 p.m. in Hong Kong, with volumes at 85 percent of the three-month average. Japan’s Topix index rose 0.4 percent as markets reopened after a holiday on Monday, with the yen strengthening 0.3 percent against the dollar. Monetary policy uncertainty has reignited volatility in global markets over the past two weeks, with traders split over what action the BOJ will take in its review Wednesday. Bets on an interest-rate increase from the Fed this week remain around 20 percent even as U.S. inflation data for August rose more than projected.

“No one is prepared to take on too much risk ahead of the Bank of Japan and the Fed Open Market Committee meetings,” said Chris Weston, chief market analyst in Melbourne at IG Ltd. “The key this week for me is how the Japanese and U.S. fixed income markets react to either central bank decisions. If real bond yields start moving up, it will cause a tightening of financial conditions that will not be taken well by the credit or equity markets.”

The Philippines Stock Exchange Index was up the most among major Asian bourses, rising 1.3 percent. Some local investors are probably bargain-hunting after 18 straight days of net selling by foreign funds, said Luis Limlingan, managing director Reginal Capital Development Corp. in Manila.

Australia’s S&P/ASX 200 Index closed up 0.2 percent after a technical fault shut the nation’s largest exchange Monday in the biggest challenge yet for the bourse operator’s new boss. Less than two months into Dominic Stevens’ tenure, the ASX Ltd. chief executive officer was forced to apologize for a hardware failure that saw the equity exchange open late and close early in its worst outage in almost five years.

Regional Gauges

South Korea’s Kospi index rose 0.5 percent, Taiwan’s Taiex index added 0.1 percent and New Zealand’s S&P/NZX 50 Index gained 0.4 percent. Singapore’s Straits Times Index lost 0.3 percent and the Shanghai Composite Index declined 0.1 percent, as did Hong Kong’s Hang Seng Index.

Thailand’s SET Index fell the most in the region, dropping 1.4 percent, after a five-day rally in which it rose 5.7 percent. Some investors may have been concerned after foreign funds pulled $99 million from Thai stocks Monday, the biggest outflow since January, said Tawatchai Asawapornchai, deputy managing director at ASL Securities Co. in Bangkok.

KDDI Corp. rose 1.7 percent in Tokyo, pacing gains among Japanese phone operators after Nomura Holdings Inc. said strong demand for the iPhone 7 will help improve the carrier’s profits. International Container Terminal Services Inc. jumped 5.5 percent in Manila, extending gains for a second day, after the Philippine’s largest port operator said new terminals in Australia, Congo, Colombia and Iraq will boost earnings in the next five years.

Galaxy Entertainment Group Ltd. fell 2.2 percent in Hong Kong, pacing losses among casino operators, as Sanford C. Bernstein & Co. said Macau gaming revenues are weaker than expected this month.

Futures on the S&P 500 Index added 0.2 percent. The U.S. equity benchmark index was little changed Monday, after being up as much as 0.7 percent, as Apple Inc. declined for a second day to weigh on technology shares.

Oil halted gains on speculation supply from Nigeria and Libya may rise as conflicts within the two OPEC members ease, sustaining a global glut. West Texas Intermediate crude futures fell 0.8 percent after rising 0.6 percent on Monday.