Japanese shares climbed, leading Asian stocks higher, as the dollar traded at a two-month high versus the yen before the Federal Reserve releases minutes of its last meeting. Nickel slumped a third day and oil rallied.
The Topix index climbed 0.9 percent by 2:09 p.m. in Tokyo, heading for a fourth straight advance as the dollar bought 120.97 yen. The MSCI Asia Pacific Index climbed 0.2 percent, while the Shanghai Composite Index jumped 1.5 percent. Standard & Poor’s 500 Index futures were little changed. The Bloomberg Dollar Spot Index was steady after its biggest two-day advance since 2011. U.S. oil rose for the first time in six days. Nickel sank 1.6 percent in London.
The dollar extended a rebound from a four-month low as the highest new-housing starts since 2007 reignited speculation about when the Fed will raise rates, underscoring the divergence of U.S. monetary policy from Europe and the Asia Pacific. The euro and European bond yields plunged Tuesday after the region’s central bank said it will bring forward some asset purchases to counter a lull during the summer holiday period. The Bank of Japan meets Thursday to review its stimulus policies.
“The dollar is getting a boost from widening yield differences between the U.S. and Germany,” said Daisuke Uno, the Tokyo-based chief strategist at Sumitomo Mitsui Banking Corp. “U.S. data was strong while ECB officials’ comments pushed German yields lower and this has sparked euro selling and dollar buying.”
Courtesy: Bloomberg Business 20 May 2015