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By Scott Murdoch
MELBOURNE (Reuters) – Asian stock markets were mostly higher on Tuesday, although global investor attention has been focused on the possibility of a rising US interest rate in the coming months, following two years of unprecedented pandemic policies.
MSCI Asia-Pacific equities rose 0.4% outside of Japan, according to Martin Luther King Jr. after the US holiday market closed at night. The index rose 1.1% this month.
Shares in Australia rose 0.29%, while in China the CSI300 rose 0.33% at the start of trading.
Hong Kong rose 0.61%.
the stock index was 0.63% higher before the Bank of Japan’s decision, at 0230-0500 GMT.
Japan’s central bank does not expect a very low rate change, but inflation is likely to rise in 2022.
Prior to the outcome of the meeting, the dollar was trading against the yen at 114.51. It is still a far cry from last year’s low of 113.49 this year.
The US Federal Reserve is due to meet January 25-26, and while rates are not expected to change then, more and more investors believe March will be the start of a tightening cycle.
Rate increases are generally considered negative for the most risky stocks, for example.
“Investor attention continues at the Fed and rates are rising,” John Milroy, Sydney’s Ord Minnett brokerage adviser, told Reuters.
“We believe that the markets today will be faster than expected. Boom conditions continue in the US with a tight labor market. Good for global growth, but adds to inflationary pressures.”
The possibility of higher U.S. rates was also playing out in fixed income markets on Tuesday, following the close of the U.S. market on Monday.
In the Asian cash market on Tuesday, two-year earnings rose more than 1% for the first time since February 2020.
Two-year earnings follow short-term rate expectations and rose 3.7 basis points (bps) to 1.0054%.
Five-year earnings rose 3.6 bps to 1.5960%, the highest since January 2020. The benchmark 10-year yields rose about 2 bps in early Tokyo trading.
, which follows the green card against a basket of other major trading partners, rose to 95,254.
The barrel rose 0.49% to $ 84.23. It rose to $ 86.53 per barrel.
Gold was slightly lower. It sold for $ 1,818,2274 per ounce. [GOL/]
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