Asian stocks rise on US rally ahead of expected Fed rate hike

TOKYO (AP) — Asian stocks mostly rose on Tuesday, after Wall Street closed higher on a late buying spree following recent losses as investors wait for another interest rate hike by the US Federal Reserve.

Markets are worried about whether the Fed’s plan to quell the highest US inflation in four decades could be too aggressive and push the economy into recession by curbing growth too hard.

Japan reported that its consumer inflation jumped in August to 3.0%, its highest level since November 1991 but well below the 8% and above in the United States. Core inflation excluding volatile fresh food prices rose 2.8%. The Bank of Japan is expected to hold a two-day monetary policy meeting later this week, although analysts expect the central bank to stick to its accommodative monetary policy.

“Accommodative monetary policies are expected to remain at the next meeting this week. BOJ Governor Haruhiko Kuroda has previously mentioned that he wants to see a “stable and sustainable increase” in wages and salaries. prices before considering any policy changes,” Yeap Jun Rong, market strategist at IG in Singapore, said in a statement.

Japan’s benchmark Nikkei 225 added 0.4% in morning trade to 27,672.59. Australia’s S&P/ASX 200 jumped 1.2% to 6,797.30. South Korea’s Kospi added 0.5% to 2,368.09. In China, where the prime lending rate was unchanged, the Shanghai Composite gained 0.5% to 3,130.86. Hong Kong’s Hang Seng added 1.3% to 18,810.35.

On Monday, the Wall Street indices oscillated between modest gains and losses for much of the day before a burst of buying in the final hour of trading. The S&P 500 rose 0.7%, rebounding from a 0.9% decline. It closed at 3,899.89.

The Dow Jones Industrial Average rose 0.6% to 31,019.68 and the Nasdaq composite climbed 0.8% to 11,535.02.

Tech stocks, retailers, banks and industrial companies helped boost the market. Apple rose 2.5%, Home Depot gained 1.6%, Bank of America rose 1.7% and United Airlines closed up 3.3%.

Health care and real estate stocks fell, tempering gains elsewhere in the market. Pfizer fell 1.3% and Welltower 2.2%.

The 2-year Treasury yield, which tends to track Fed action expectations, rose to 3.94% from 3.87% late Friday. The 10-year yield, which influences mortgage rates, rose from 3.45% to 3.49%.

Small company stocks also gained ground. The Russell 2000 closed up 0.8%.

Trading volumes were lower than normal, a sign that most traders are hesitant to make big changes ahead of the Fed’s policy announcement on Wednesday afternoon, said Scott Ladner, chief investment officer at Horizon Investments.

“Nobody really wants to position themselves in front,” he said. “It’s been such a slippery market both up and down.”

The US market just had its worst week in three months following a surprisingly scorching inflation report and major companies including FedEx warning of deteriorating trends in the economy.

Investors will get another update on the housing sector on Wednesday when the National Association of Realtors releases August numbers for sales of previously occupied homes.

Average long-term mortgage rates in the United States rose above 6% last week for the first time since the housing crash of 2008. These higher rates could make an already tight housing market even more expensive for American buyers.

In energy trading, benchmark U.S. crude gained 5 cents to $85.41 a barrel in electronic trading on the New York Mercantile Exchange. It rose 60 cents to $85.36 a barrel on Monday.

Brent crude, the international standard, took 13 cents to $92.13 a barrel.

In currency trading, the US dollar fell slightly to 143.20 Japanese yen from 143.22 yen. The euro fell from $1.0024 to $1.0030.

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AP Business Writers Damian J. Troise and Alex Veiga contributed.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

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