HONG KONG (AFP) – Asian stock markets mostly rose for a third straight trading day Tuesday after Federal Reserve boss Janet Yellen said the US economy was still in good shape and that any increase in borrowing costs would be slow and low.
After Friday s well-below-forecast US jobs report raised worries about the country s growth — and sent the dollar and Wall Street tumbling — Yellen said that while they were “concerning” she was still upbeat about the outlook.
Her closely watched speech urged markets not to “attach too much significance to any single monthly report”, adding that the overall jobs market was “quite positive”.
She did not give any indication of when the central bank would again lift interest rates but said any move would be gradual.
Friday s news that the US economy created less than a quarter of the jobs expected in May scythed expectations for a rate hike in June or July — as had been strongly hinted by the Fed — and caught traders off-guard, fuelling uncertainty.
But Yellen s comments helped steady nerves in New York, where all three main indexes ended sharply higher, while the dollar managed to staunch a sell-off after Friday s two percent fall against the yen and euro.
Japan s Nikkei was up 0.4 percent by the break, while Hong Kong jumped 0.9 percent, Sydney added 0.2 percent and Seoul was 0.9 percent higher. Taipei tacked on one percent and Singapore 0.6 percent, while Manila and Jakarta also racked up significant gains.
“Spooked by Friday s jobs report, the market became uncertain whether we d have even one rate hike this year,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told Bloomberg News.
“That kind of risk-off reaction was exaggerated.”
The dollar was at 107.55 yen Tuesday, compared with 107.57 yen in New York but well up from the low of 106.38 yen hit after the initial data release.
The weakness of the dollar was also one of the factors that supported oil prices, with both main contracts sitting at near one-year highs around the $50 mark.
Adding to the commodity s gains were comments from key producer Abu Dhabi that the global glut, which has been a millstone since mid-2014, was shrinking, while unrest in Nigeria was also hitting exports from the country.
On foreign exchanges the British pound was volatile after opinion polls suggested more people were in favour of leaving the European Union, just weeks ahead of a referendum on June 23.