Asia stocks hit 2-week high as Fed talk turns dovish

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Asia's stockmarkets rose on Wednesday and the dollar beat a retreat as a dovish shift in tone from Federal Reserve officials had traders paring U.S. interest rate expectations, though with a wary eye on U.S. inflation data due on Thursday.

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12 Oct 2023

The S&P 500 gained overnight and MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.3% to a two-week high in morning trade. Japan's Nikkei rose 0.5%.

«I actually don't think we need to increase rates anymore,» Atlanta Fed President Raphael Bostic told the American Bankers Association, to applause, in Nashville on Tuesday.

The remark follows several Fed officials noting that recent rises in longer-term yields may help do the work of tightening financial conditions and crimping inflation, leaving the central bank with less to do in terms of short-term rate levels.

Wagers on whether the Fed might hike again this year have pulled back a bit this week and Treasury yields have come sharply down from 16-year highs, yanking the dollar with them.

The 10-year yield fell 12.7 basis points on Tuesday and was