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Asian stocks rebounded again on Wednesday, with Japanese equities leading the way after the Bank of Japan’s deputy governor eased investors concerns after saying there would be no interest rate hikes when markets are unstable.
“BOJ needs to maintain monetary easing with the current policy rate for the time being, with developments in markets at home and abroad being extremely volatile,” Shinichi Uchida said at a meeting with business leaders in Japan.
His statements contrast BOJ Governor Kazuo Ueda’s hawkish comments last week that led to a widespread unwinding of yen carry trades.
“Uchida’s comments might stabilize the yen and Japanese equity markets around current levels, but initiating new carry trades remains challenging due to higher volatility and concerns about the U.S. economy,” said Charu Chanana, head of FX strategy, Saxo. “The risk-reward balance still leans towards further yen strengthening, with the timeline dependent on the Fed’s approach to rate cuts.”
The benchmark Nikkei 225 index (NKY:IND) ended 1.2% higher on Wednesday after a 10% gain on Tuesday. The yen (JPY:USD) fell over 2% against the dollar.
Elsewhere in Asia: South Korea (KOSPI) +1.8%, Hong Kong (HSI) +1.2%, India (SENSEX) +0.8%, China (SHCOMP) +0.1%.
Over in the U.S., Dow futures (INDU) +0.4%, S&P futures (SPX) +0.3%, Nasdaq futures (US100:IND) +0.3%.
