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Shares in Asia gain led by Tokyo, Sydney as easy monetary policy remains

Published 21/07/2015, 02:21 pm
© Reuters.  Asian shares up on central bank minutes
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Investing.com - Asian shares edged higher on Tuesday as central bank minutes from Sydney and Tokyo showed the scope for easy monetary policies to continue.

The Nikkei 225 rose 0.55%, while the S&P/ASX 200 gained 0.29% In China, the Shanghai Composite was up 0.26% and in Hong Kong, the Hang Seng index rose 0.39%.

The Australian dollar exchange rate and overall economic growth in the second quarter will be key for the monetary policy stance with current conditions making the record low 2% the right stance for now, the Reserve Bank of Australia said in the minutes of its latest monetary policy review released on Tuesday.

On July 7, the RBA left the cash rate unchanged at 2.0% at the meeting and issued a statement similar to June, reiterating the outlook that its future monetary policy moves will be influenced by incoming data and financial conditions.

Earlier, the Bank of Japan board was largely in agreement that prices will rise in the longer term, though one member said it would show up moderately in consumer inflation, according to minutes of the June monetary policy meeting released on Tuesday.

However, other members said the impact of the quantitative easing to buy ¥80 trillion of mostly government bonds annually has had a big impact on the economy and higher prices are spreading and are also driven by higher wages.

Board member Takahide Kiuchi has been the lone dissenter in recent reviews by the nine-member board, calling for the easing program to be scaled back to ¥45 trillion.

Later, the BoJ will release a speech by Governor Haruhiko Kuroda at the Amartya Sen Lecture in Bangkok hosted by Cambridge Society of Thailand at
2215 (1315 GMT).

Overnight, U.S. stocks were higher after the close on Monday, as gains in the Telecoms, Technology and Financials sectors led shares higher.

At the close in New York, the Dow Jones Industrial Average gained 0.08%, while the S&P 500 index gained 0.08%, and the NASDAQ Composite index added 0.17%.

Expectations have mounted for a U.S. rate hike in the near future continued to lend broad support to the greenback.

Data on Friday showed that the U.S. consumer price index rose 0.3% in June, while consumer prices ticked up by 0.1% last month on a yearly basis.

A separate report showed that U.S. housing starts rose 9.8% to 1.174 million units in June, compared to expectations for an increase of 6.2%.

U.S. building permits rose 7.4% to 1.343 million units last month, confounding expectations for a 11.8% drop.

The data came after Federal Reserve Chair Janet Yellen said, in testimony before the House Financial Services committee, that the Fed is likely to raise rates "at some point this year." She added that the U.S. labor market healthier but "still some slack."

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