By Shinichi Saoshiro
TOKYO (Reuters) - Asian stocks rose and the dollar sagged on Thursday after Federal Reserve Chair Jerome Powell reinforced prospects of a U.S. interest rate cut later this month.
In an appearance before his congressional overseers on Wednesday, Powell confirmed that the U.S. economy is still under threat from disappointing factory activity, tame inflation and a simmering trade war. [nL2N24B1B9]
Powell said the central bank stands ready to "act as appropriate".
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose 0.2%, while Japan's Nikkei <.N225> added 0.15%.
South Korea's KOSPI <.KS11> climbed 0.7%. Australian stocks <.AXJO> were steady.
U.S. stocks ended higher on Wednesday and the S&P 500 <.SPX> briefly crossed the 3,000-point mark for the first time following Powell's remarks. [.N]
"The markets had hoped for Powell to express dovish views and they got what they wanted," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
"The focus going forward is U.S. data, such as tonight's CPI, and whether the economy warrants a 50 basis point rate cut this month."
A strong June U.S. jobs report released earlier this month had curbed market expectations that the Fed could lower rates by 50 basis points (bps), and the markets had viewed a 25 bps cut as a more likely option.
But the Fed chair's cautious stance on the world's largest economy helped revive views of a chance of heftier easing at the next Fed policy meeting on July 30-31.
The chance of a 50 bps cut rose to 27.6% from 3.3% on Tuesday, according to CME Group's FedWatch tool.
The dollar index <.DXY> against a basket of six major currencies stood at 97.055 after falling 0.4% overnight, when it pulled back from a three-week peak of 97.588 in the wake of Powell's comments.
The greenback was down 0.15% at 108.320 yen
The Australian dollar
The 10-year U.S. Treasury yield
In commodities, U.S. crude oil futures
The contract had surged 4.5% on Wednesday after U.S. crude inventories shrank and as major producers cut nearly a third of offshore Gulf of Mexico production ahead of an expected storm. [O/R]
(Editing by Kim Coghill)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Jul 11, 2019 07:05:07 IST