Japan shares jump as yen bows to strong dollar
By Wayne Cole SYDNEY (Reuters) - Asian shares followed Wall Street higher on Wednesday as a bullish outlook from the head of the U.S. central bank buoyed the dollar, lifted Tokyo shares to a one-month top and sent gold to a one-year trough. Japan's Nikkei leapt out of the blocks with a 1 percent gain as a weakening yen promised to fatten exporters' profits.
By Wayne Cole
SYDNEY (Reuters) - Asian shares followed Wall Street higher on Wednesday as a bullish outlook from the head of the U.S. central bank buoyed the dollar, lifted Tokyo shares to a one-month top and sent gold to a one-year trough.
Japan's Nikkei <.N225> leapt out of the blocks with a 1 percent gain as a weakening yen promised to fatten exporters' profits.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> added 0.16 percent and South Korea's market <.KS11> 0.85 percent.
Federal Reserve Chairman Jerome Powell stuck with an upbeat assessment on the U.S. economy while downplaying the impact of global trade risks on the outlook for rate rises.
"The outlook is consistent with two further quarter point rate increases this year, likely in September and December," said Barclays economist Michael Gaspen.
"The main risk is that individuals, business, and financial markets have underestimated the desire of Trump to re-orient trade flows and that further steps to implement tariffs will lead to a reduction in confidence, a slowdown in hiring, and a correction in equity markets," he added.
BofA Merrill Lynch's latest fund manager survey showed a trade war remained the biggest risk cited by no less than 60 percent of respondents.
For now, U.S. companies seem to be profiting mightily from tax cuts as the earnings season shifts into high gear. Analysts now see second-quarter S&P 500 earnings growth of 21.2 percent, up from 20.7 percent on July 1.
Of the 39 companies in the index that have reported so far, 84.6 percent have come in ahead of Street expectations. The Dow <.DJI> ended Tuesday up 0.22 percent, while the S&P 500 <.SPX> gained 0.40 percent and the Nasdaq <.IXIC> 0.63 percent.
POUND IN PERIL
Powell's support for more rate hikes sent two-year Treasury yields
Against a basket of currencies, the dollar was up at 95.045 <.DXY>, after jumping 0.46 percent overnight. It also climbed to its highest since January against the yen at 113.07
The euro was stuck at $1.1655
The pound suffered another bout of Brexit jitters after British Prime Minister Theresa May only just cleared the latest parliamentary hurdle to her leaving plans.
Bank of England Governor Mark Carney warned a no-deal Brexit would have "big" economic consequences and force a review of plans to raise interest rates.
Sterling was last huddled at $1.3104
The rising U.S. dollar coupled with the prospect of higher U.S. interest rates spelt trouble for gold, which crashed through major chart support to hit a one-year low.
Oil prices also eased early on Wednesday, with Brent
(Reporting by Wayne Cole; Editing by Eric Meijer)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.