TOKYO (Reuters) - A strong session on Wall Street led Asian shares up on Thursday, after minutes of the U.S. Federal Reserve’s last meeting reassured investors that policy makers will continue to support the world’s biggest economy, depressing the safe-haven yen.
Medium and long-dated U.S. Treasury yields climbed overnight, reflecting discussions by the Fed for the eventual tightening of policy though the start of that cycle was some way off.
The closely-watched minutes of the Fed’s April Open Market Committee meeting released on Wednesday showed that policy makers had begun to lay the groundwork for an eventual exit from their easy stance, but that the discussions were “prudent planning” and not a sign rate hikes would come any time soon.
“There was a lot of rejoicing at the Fed minutes; a one line synopsis of the release would read – the Fed continues to champion accommodation for the foreseeable future,” Evan Lucas, market strategist at IG in Melbourne, said in a note to clients.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent while Tokyo’s Nikkei climbed 1 percent.
Wall Street had an encouraging session on Tuesday, with the Dow Jones industrial average gaining 1 percent, its biggest daily percentage jump since mid-April
Markets will be keeping an eye on a private survey of China’s factory activity due around 0145 GMT, followed by euro zone purchasing managers surveys.
Recent Chinese data have failed to quell concerns about a slowing economy, meaning any disappointment in the PMI report could quickly sour the mood.
For now, the return of risk appetite weighed on the yen and underpinned the dollar somewhat.
The greenback rose 0.1 percent to 101.44 yen, extending its rebound from a 3-1/2 month low of 100.805 yen touched on Wednesday when Bank of Japan Governor Haruhiko Kuroda reiterated his optimistic view on the Japanese economy and provided no hints of further monetary easing in the near term.
The dollar also advanced against the euro, which has been hurt by growing expectations the European Central Bank will ease monetary policy in June and potentially destabilising European Parliament elections later this week.
The euro stood at $1.3684 after hitting a three-month trough of $1.3634 on Wednesday.
The single currency was also on the back foot against the British pound. It traded at 80.98 pence after slipping to a 17-month low of 80.85 pence.
In commodities, the improved appetite for risk reduced gold’s safe haven appeal.
Spot gold stood little changed at $1,291.54 after shedding 0.2 percent on Wednesday.
Editing by Shri Navaratnam