Asian stock markets welcome Fed’s stance

HONG KONG (AFP) — Most Asian equity markets outside Japan rallied Thursday after comments by the US Federal Reserve cooled expectations of an early rate hike, while the euro and yen retreated against the dollar after racking up big gains in New York.

Philippine shares seesawed to the green side on Thursday after Wall Street’s rise overnight. Philippine Stock Exchange index went back to 7,800level, increasing by 57.97 points, or 0.75 percent to 7,814.55. The wider all shares, on the other hand, slightly went up by 18.59 points, or 0.41 percent to 4,520.78. Majority of the sectors gained points but the two of them, industrial and mining and oil, both went down.

While the US central bank opened the door for a rise after six years of zero percent rates, it lowered its forecasts for economic growth and inflation and stressed it would remain cautious before making any move.

News that the Fed is in no hurry to depart from the loose monetary policy that has supported shares sent Wall Street surging, providing a strong platform for Asian indexes.

At the close of trade Sydney was 1.86 percent higher, adding 108.5 points to 5,950.8 while Seoul ended up 0.47 percent, or 9.44 points, at 2,037.89.

Hong Kong climbed 1.07 percent in the afternoon and Singapore was 0.36 percent higher.

However, Tokyo sank 0.35 percent, or 67.92 points, to close at 19,476.56 as exporters were hurt by the strengthening yen. Shanghai retreated 0.31 percent in late trade after rising almost nine percent in a six-session winning streak.

After a two-day policy meeting, the Fed issued a statement that removed a pledge to remain ‘’patient’’ on raising interest rates, signalling a possible midyear rate increase.

But bank chair Janet Yellen stressed growth prospects were more muted than three months ago, despite strong increases in jobs creation. She noted consumer spending has slipped, inflation has declined, wages are flat, and the stronger dollar has hurt US exports.

The policy committee lowered its rate outlook to 0.5- 0.75 percent for the end of this year, from 1.0 percent previously, while also reducing its 2016 forecast to 1.75- 2.5 percent from 2.5 percent.