Asian Shares Mostly Higher On Fed Hopes

Asian stocks hit two-week highs on Wednesday, while the dollar wobbled as weak U.S. labor market data bolstered bets that the Fed’s rate hike cycle could be nearing the end.

Overnight data showed U.S. job openings dropped to the lowest in nearly two-and-a-half years in July, signaling easing labor market pressures and allowing the Fed room to forgo more rate increases this year.

The CME FedWatch Tool shows that markets are now pricing in an 89 percent chance of the Fed standing pat at its meeting next month and a 50 percent chance of another pause at the November meeting.

U.S. nonfarm payrolls and personal consumption expenditure reports due this week are expected to provide a much clearer economic picture.

Gold held near three-week high in Asian trading, while oil prices climbed on data showing a large U.S. stockpile draw and concerns over the Hurricane Idalia, which crawled towards Florida’s Gulf Coast.

China’s Shanghai Composite Index fluctuated before ending marginally higher at 3,137.14 as investors awaited Thursday’s PMI data for directional cues.

Hong Kong’s Hang Seng Index finished marginally lower at 18,482.86 despite reports that China’s largest banks are preparing to cut interest rates on existing mortgages and deposits.

Japanese shares eked out modest gains after rising U.S. yields pushed the yen to its lowest in almost 10 months.

The Nikkei 225 Index rose 0.3 percent to 32,333.46, extending gains for a third straight session and reaching its highest level since August 10. The broader Topix Index settled 0.4 percent higher at 2,313.38.

Banks and Kyocera topped the gainers list to rise 1-2 percent. Toyota Motor ended up more than 1 percent after an announcement that it would restart operations at its assembly plants in Japan on Wednesday.

Australian markets rallied to reach a two-week high after data showed Australian consumer price inflation slowed to a 17-month low in July, helping move the discussion toward the prospect of interest-rate cuts.

The benchmark S&P ASX 200 Index jumped 1.2 percent to 7,297.70, while the broader All Ordinaries Index closed 1.2 percent higher at 7,506.80.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index finished marginally lower at 11,521.12 after the release of weak housing data.

Seoul stocks rose for a third consecutive session, with the Kospi rising 0.4 percent to 2,561.22 on hopes for Fed rate pause.

U.S. stocks rose sharply overnight and Treasury yields eased, as data showing a dip in job openings for the third straight month and deteriorating consumer confidence raised hopes of a pause in interest rate hikes by the Federal Reserve.

The tech-heavy Nasdaq Composite jumped 1.7 percent to extend gains for a third day running, while the S&P 500 rallied 1.5 percent and the Dow advanced 0.9 percent.

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