Asia shares rise after Wall Street gains

 An employee of the Indonesia Stock Exchange takes a nap while others work in Jakarta. Indonesian stocks rallied to a one-year high yesterday after most unofficial tallies showed governor Joko Widodo ahead of ex-general Prabowo Subianto in a closely fought race to lead Southeast Asia’s biggest economy.

AFP/Tokyo

Asian markets were mostly higher yesterday after Wall Street advanced in response to an upbeat outlook for the US economy by the Federal Reserve, while Chinese trade growth picked up pace in June.

An indication from the Fed that it will keep interest rates at record lows well into next year kept downward pressure on the dollar.  Sydney added 0.22%, or 11.92 points, to close at 5464.4 despite soft jobs figures, while Seoul added 0.12%, or 2.34 points, to 2,002.84 and Hong Kong put on 0.27%, or 62.92 points, to 23,238.99. Shanghai was flat, nudging 0.27% down to 2,038.34.

Tokyo dipped 0.56%, or 36.89 points, to 15,265.76 as the strong yen hit exporters.

Jakarta rallied on projections the business-friendly Joko Widodo would win a close presidential election.

US shares provided a positive lead as investors picked up bargains after a two-day losing streak thanks to an upbeat assessment of the US economy by Fed policymakers in the minutes of their June board meeting.

The minutes showed the bank plans to end its five-year-long, economy-boosting bond-buying scheme in October.

“If the economy progresses about as the committee expects... this final reduction would occur following the October meeting,” the minutes said.

The timetable was as expected following a slew of strong data out of Washington in recent weeks, the latest being last month’s better-than-forecast jobs report.

The bank also said it expects not to hike interest rates for “a considerable time” after the stimulus programme ends, “especially if projected inflation continued to run below the committee’s 2% longer-run goal”, the minutes said.

However, expectations that rates will remain low weighed on the dollar. In afternoon Tokyo trade the greenback was at 101.50 yen, compared with 101.64 yen in New York.

The euro bought $1.3641 and 138.50 yen against $1.3642 and 138.66 yen.

In China the General Administration of Customs said exports rose 7.2% year-on-year in June while imports gained 5.5%.  The figures were up from May although exports were well short of forecasts.

Indonesian shares rallied 1.46%, or 73.30 points, to 5,098.01, as unofficial tallies showed Widodo ahead of Prabowo Subianto in the race to lead Southeast Asia’s biggest economy.

Investors have been hoping for victory for the Jakarta chief, the first serious presidential contender without deep roots in the Suharto era, seeing him as a potential reformer and clean leader in a graft-ridden country.

In other markets, Taipei rose 0.79%, or 75.14 points, to 9,565.12, Wellington added 0.10%, or 5.27 points, to 5,128.01, Manila rose 0.48%, or 33.42 points, to 6,937.21, Bangkok gained 0.67%, or 10.09 points, to 1,518.01, Singapore eased 0.18%, or 5.96 points, to 3,269.50 and Kuala Lumpur ended flat at 1,892.62.