© Reuters. By Gina Lee
Investing.com – Asia Pacific stocks were mostly up Wednesday morning, with reassuring comments from U.S. Federal Reserve officials on inflation and monetary policy starting to calm investors’ frayed nerves.
Japan’s edged up 0.16% by 10:11 PM ET (2:11 AM GMT), with the Bank of Japan released the earlier in the day. The country also released its and purchasing managers’ index for June earlier in the day, with the former standing at a lower-than-expected 51.5.
South Korea’s was up 0.28% while in Australia, the was down 0.41%.
Hong Kong’s gained 0.78%.
China’s inched down 0.02% while the was up 0.38%.
The benchmark climbed for a second day as insisted that the recent larger-than-expected inflation pressures are transitory.
The and U.S. Treasury yields held declines, while bitcoin rebounded from its fall below the $30,000 mark.
Markets are finally starting to stabilize after the Fed’s sudden hawkish tone in its surprised investors. With the decision hinting at earlier than-expected asset tapering and interest rate hikes, officials have since sought to reassure continuing Fed support for the economy via asset purchases and low interest rates.
The Fed’s shift during the previous week to acknowledge higher inflation and pull forward its rate hike projections is “a reflection of more positive longer-term dynamics,” BlackRock (NYSE:) Investment Institute analysts led by Jean Boivin said in a report.
“We believe the Fed’s new outlook will not translate into significantly higher policy rates any time soon. This, combined with the powerful restart, underpins our pro-risk stance,” the report added.
In his testimony to the House of Representatives Select Subcommittee on Tuesday, Powell said that recent price increases were bigger than expected but insisted that they will likely wane. He also acknowledged the uncertainty on this view and said the central bank would be patient in increasing borrowing costs.
Ahead of Powell’s testimony, New York Fed President John Williams said that a discussion about raising interest rates is still “way off in the future.” Meanwhile, Cleveland Fed President Loretta Mester said additional employment gains for the next several months are her pre-requisite to assessing whether the U.S. economy has achieved the progress required to begin asset tapering. More Fed officials will also deliver comments throughout the week.
The Fed will also release the results of its on Thursday, with the handing down its policy decision earlier in the day.
On the data front, U.S. for May and the for the first quarter will be released later in the day.
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