TOKYO (AP) — Shares were mostly higher in Asia Thursday following a broad rally on Wall Street that nudged the Dow Jones industrial average to a new high after Federal Reserve Chair Janet Yellen told Congress the central bank may slow the pace of its interest rate increases if inflation remains below its target level.
KEEPING SCORE: Japan's Nikkei 225 stock index was flat at 20,094.61 and Hong Kong's Hang Seng index jumped 1.1 percent to 26,337.49. The Shanghai Composite index climbed 0.4 percent at 3,210.65 and the S&P ASX 200 surged 1.1 percent to 5,735.40. South Korea's Kospi gained 1.2 percent to 2,419.18. Shares in Southeast Asia and Taiwan were mostly higher.
FED TALK: Yellen's comments in her semiannual testimony to Congress assuaged concerns among some traders that the Fed has been too hasty in raising interest rates despite stalling inflation and sluggish U.S. economic growth of just 1.4 percent in the first quarter. Many economists believe the Fed, which has raised rates three times since December, will increase rates one more time this year. "Investors would prefer lower interest rates, particularly if the economy isn't gaining the kind of traction that would warrant a faster rate-hike path," said Quincy Krosby, chief market strategist at Prudential Financial. "This is positive for the markets."
THE QUOTE: "A coordinated jump for global equity markets following the considerably dovish tone from Federal Reserve chair Janet Yellen's Congressional testimony sets Asian markets for gains today," Jingyi Pan of IG said in a commentary. "Some emphasis will also be placed on China's trade release today with the bias on the upside."
WALL STREET'S DAY: The Standard & Poor's 500 index gained 0.7 percent to 2,443.25 and the Dow rose 0.6 percent to 21,532.14, a record high. The average last set a record high on June 19. The Nasdaq composite added 1.1 percent to 6,261.17, while the Russell 2000 index of smaller-company stocks advanced 0.8 percent to 1,424.32.
ENERGY: Benchmark U.S. crude rose 3 cents to $45.52 per barrel in electronic trading on the New York Mercantile Exchange. It rose 45 cents, or 1 percent, to settle at $45.49 per barrel on Wednesday. Brent crude, used to price international oils, added 4 cents to $47.78 per barrel. It gained 22 cents, or 0.5 percent, to close at $47.74 per barrel in London.
CURRENCIES: The dollar slipped to 112.95 yen from 113.18 yen. The euro rose to $1.1435 from $1.1413.