Strong gains in Asia in the aftermath of Powell’s speech

Asian stocks are moving higher on Wednesday in the wake of yesterday’s assurances by Federal Reserve Chairman Jerome Powell that the Fed’s return to a more normal policy would not jeopardize the economy’s recovery.

“Now is the time to start moving from the context of the pandemic to a more normal level,” Paul told a Senate committee yesterday. “However, this should not have a negative impact on employment,” he added.

Investors expect the Fed to raise interest rates for the first time in March, two years after they cut close to zero due to the coronavirus crisis. Many analysts now expect the central bank to raise interest rates four times this year, instead of three, in order to bring inflation under control.

On the board, the Japanese Nikkei 225 index jumped 1.9% to 28,765.66 points.

In Hong Kong the Hang Seng index recorded a rally of 2.6%, while in mainland China the Shanghai Composite strengthened by 0.8%.

Data released today in China showed that inflation and the producer price index fell more than expected in December.

In particular, the producer price index increased by 10.3% compared to the previous year in December, compared to the increase of 12.9% in November, according to the statistical service. Estimates spoke of an increase of 11.2%.

Meanwhile, the consumer price index in China rose 1.5% in December from a year earlier, up from 2.3% in November as vegetable prices fell. Estimates spoke of 1.6%.

South Korea’s Kospi rose 1.5%, while in Australia the ASX 200 rose 0.6%.

Powell’s reassuring statements yesterday led the S&P 500 to 0.9% gains after a negative run of five consecutive sessions. The industrial Dow Jones also closed with a positive sign, while the technological Nasdaq starred in the rise, closing at + 1.4%.