Asian Stocks Up Over Fed’s Continued Dovish Tone, COVID-19 Vaccine Progress By

© Reuters.

By Gina Lee – Asia Pacific stocks were up Thursday morning, boosted by a bond selloff and reassurance from U.S. Federal Reserve Chairman Jerome Powell that interest rates would remain low.

Japan’s rose 1.66% by 10:38 PM ET (3:38 AM GMT) and South Korea’s jumped 2.53%. In Australia, the gained 1%.

Hong Kong’s rose 2.11%. Financial secretary Paul Chan handed down the city’s budget on Wednesday, with eligible residents to receive HK$5,000 ($644.77) in digital coupons. Chan also raised the stamp duty for stock transactions to 0.13% from the previous 0.1%.

China’s gained 1.07% and the was up 0.78%.

during a second day of testimony before Congress on Wednesday, helped calm fears that higher inflation rates could see the central bank tighten monetary policy.

He pointed out the long road ahead for the U.S. economic recovery and that signs of prices rising would not necessarily lead to persistently high inflation, telling the House Financial Services Committee, “Our policy is accommodative because unemployment is high and the labor market is far from maximum employment.”

“The dovish influence from the Fed is going to continue to resonate over in Asia. That’s really good for emerging market assets when we’ve got a really good impulse from the Fed,” Axi chief global markets strategist Stephen Innes told Reuters.

On the COVID-19 vaccines front, results from an Israeli study published and peer-reviewed in the New England Journal of Medicine on Wednesday gave investors sentiment a boost. The study showed that two doses of the Pfizer Inc. (NYSE:)/BioNTech SE (F:) COVID-19 vaccine cut symptomatic COVID-19 cases by 94% across all age groups, and severe illnesses by nearly as much.

The U.S. Food and Drug Administration also said on Wednesday that Johnson & Johnson’s (NYSE:) one-dose COVID-19 vaccine appeared safe and effective in clinical trials, with emergency use approval potentially coming by the end of the week.

Investors are analyzing the market implications of a faster-than expected recovery, as “the combination of pent-up demand, with the stimulus checks on top of that, could lift inflation,” Barclays’ head of global inflation market strategy Michael Pond told Bloomberg.

However, investors will also have to analyze a new variant of the COVID-19 virus that is on the rise in New York City. The new variant, known as B.1.526, shares some similarities with the more transmissible variant discovered in South Africa and was first identified in November 2020. The NYC variant represented around 12% of all cases by mid-February, researchers at Columbia University Vagelos College of Physicians and Surgeons, said on Wednesday.

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