Asian Stocks Up, Investors Digest Further Fed Comments on Asset Tapering By

© Reuters.

By Gina Lee – Asia Pacific stocks were mostly up Thursday morning, with investors continuing to digest the most recent comments from U.S. Federal Reserve officials on asset tapering.

Japan’s edged up 0.15% by 10:25 PM ET (2:25 AM GMT) and South Korea’s was up 0.27%.

In Australia, the inched down 0.09%, with the country dealing with its latest, growing COVID-19 outbreak in Sydney.

Hong Kong’s jumped 1.96%.

China’s inched up 0.01% while the rose 1%. U.S.-China relations are back in the spotlight, however, with the U.S. reportedly planning to bar some

Dallas Fed President Robert Kaplan, who previously predicted an interest rate hike in 2022, said that the economy will likely meet the Fed’s threshold for tapering earlier. However, Atlanta Fed President Raphael Bostic said the central bank could slow down the process over the next few months. Neither Kaplan nor Bostic are currently voting members of the Federal Open Market Committee that directs monetary policy.

Fed officials have recently scrambled to reassure markets after its , handed down during the previous week, took a hawkish turn. Recent commentary, including from Fed Chairman Jerome Powell, stressed that a loose monetary policy would remain in place, but indicated that a gradual withdrawal of emergency support could happen in the months ahead.

Officials have also indicated that any action is dependent on inflation and employment goals being met. This has triggered a debate among investors on the outlook, with a particular focus on bets tied to accelerating growth.

“You’ve got this inflation issue that has captured the imagination of investors for the first time in a long time,” CIBC Private Wealth Management chief investment officer David Donabedian told Bloomberg. He added that he does not “have a great case for why the market takes another leap forward here over the summer.”

The Fed will also release the results of its latest , and the will hand down its policy decision, later in the day.

On the data front, June’s was a better-than-expected 62.6, the fastest pace since 2007 according to records. The , however, was lower than expected at 64.8.

Further data, including for May, the for the first quarter and for the week, are due to be released later in the day. Data on and the will follow a day later.

Meanwhile, U.S. Treasury Secretary Janet Yellen warned on Wednesday that the Treasury could exhaust emergency measures in order to avoid breaching the U.S. debt limit as soon as August 2021. She urged the U.S. Congress to take action to prevent a “catastrophic” potential default.

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