Reuters - Most share markets in Asia rose Wednesday to extend buying that has been encouraged by upbeat China and U.S. economic data. However, the dollar, U.S. bond yields and gold are steady as market participants wait to hear the U.S. Federal Reserve's view on the economy.
Following robust industrial output and retail sales data from China and higher U.S. factory production market participants are concentrating on the Federal Reserve's policy statement due later Wednesday - the first since chairperson Jerome Powell announced an increased tolerance for higher inflation.
"The risk is if we see no new developments since his Jackson Hole shoutout. This could have near-term pressure on yields ticking up, gold and precious metals complex lower, dollar higher and general risk-off in U.S. equities," Saxo Capital Markets' international macroeconomics strategist Kay Van-Petersen said.
"If we do get a surprise on the accommodative side - we've gotten this a few times from smooth Jay (Powell) - then we could get the inverse of all that, including the next big structural break higher in gold."
The Fed is due to announce its decision at 1800 GMT Wednesday followed by a news conference from Powell.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.5% higher. Australian shares gained 0.74% and Taiwan's board added 1.16%. However, China's blue chips pulled back 0.1% as market participants sold shares that had seen price gains over the past three days.
Participants are also waiting for Japan's parliamentary approval Wednesday of Yoshihide Suga as the country's next prime minister. Suga will then form a new cabinet. Japan's Nikkei erased early losses and was last up 0.14%.
U.S. politicians are at an impasse over a new stimulus package as the country suffers from lingering concerns about an economic recovery from the coronavirus pandemic.
"There is some expectation that with the U.S. Congress unwilling (or) unable to agree to a new fiscal package monetary policy may need to step in to fill the void," NAB analyst Tapas Strickland said. "Accordingly markets will be focused on any changes to forward guidance and to any balance sheet adjustments."
The Bank of Japan and the Bank of England announce their respective policy decisions Thursday.
E-mini futures for the S&P 500 were up 0.1% Wednesday after U.S. stock indexes ended off session highs with the Dow industrials closing little changed. The S&P 500 gained 0.5% while the Nasdaq composite rose 1.2%.
U.S. retail sales figures from August are also an item of interest Wednesday.
Separately, the World Trade Organization found Tuesday that the U.S. had breached international trading rules by imposing multibillion dollar tariffs in President Donald Trump's trade war with China - a ruling that angered the U.S.
In the currency market, the yen touched a two-week high of 105.26 per dollar as traders bet the Federal Reserve, acting on a more accommodative approach to inflation, might weaken the U.S. currency.
The euro was down less than 0.1% to buy $1.1838 while the dollar index, which tracks the U.S. unit against a basket of six comparative currencies, was treading water at 93.092.
The yield on benchmark 10-year Treasury notes was unchanged from Tuesday's close at 0.6789%. Spot gold held steady at $1,955.48 an ounce.
In contrast to the muted activity elsewhere, oil prices jumped as a hurricane disrupted U.S. offshore oil and gas production and as U.S. stockpiles fell.
International benchmark Brent crude rose 0.79% to $40.85 per barrel and U.S. West Texas Intermediate crude ticked up 1.02% to $38.67 a barrel.
