Asian Stocks Gain With Oil as Dollar Falls on Dovish Fed Minutes 

• Topix holds gains as Bank of Japan leaves policy unchanged
• Euro, ringgit rally as Fed signals tightening will be gradual

Stocks rallied across Asia after U.S. Federal Reserve meeting minutes reaffirmed policy makers’ faith in the world’s biggest economy and stressed the pace of any rate increases will be slow. The dollar fell, while precious metals and oil climbed.

A measure of regional equities gained 1.6 percent as of 2:46 p.m. in Tokyo after the Fed’s minutes spurred a surge in U.S. equities, with officials saying “it may well become appropriate” to raise rates in December and largely agreeing that the pace of tightening would be gradual. The euro, the ringgit and the won all climbed as a gauge of dollar strength fell from the highest in more than a decade. Japan’s currency rallied from a three-month low as the central bank made no change in its monetary policy and said “inflation expectations appear to be rising.”

“The pace of the rise is what’s much more important than the rate rise itself,” said Angus Gluskie, a managing director who oversees $550 million at White Funds Management in Sydney. “If a rise occurs slowly then markets, investors and consumers all have time to respond to it and adjust accordingly. That’s the ideal circumstance and that’s certainly what the Fed is trying to achieve.”

Asian stocks and currencies have slipped this year amid investor concern that the U.S. economy isn’t strong enough to withstand the first rate increase since 2006. Economic reports since the Fed refrained from a rate rise in October have been encouraging, with payrolls logging the biggest gain this year and unemployment falling to 5 percent. There’s a 66 percent probability that policy makers will move in December, according to futures data compiled by Bloomberg.

Stocks

Australia’s S&P/ASX 200 Index rose 2.1 percent, with materials shares leading gains. OzForex Group Ltd. surged 30 percent in Sydney after Western Union Co. offered as much as A$888 million ($632 million) in cash for the provider of online international payment services. Japan’s Topix index added 1 percent, Hong Kong’s Hang Seng Index gained 1.2 percent and the Kospi index climbed 1 percent in Seoul. Standard & Poor’s 500 Index futures advanced 0.2 percent after U.S. shares posted their biggest jump since October.

Source: Bloomberg – Asian Stocks Gain With Oil as Dollar Falls on Dovish Fed Minutes

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