TOKYO (AP) — Asian shares were mostly higher Wednesday in cautious trading ahead of closely watched congressional testimony by the U.S. Federal Reserve chairman.
Japan’s benchmark Nikkei 225 edged down nearly 0.2% in morning trading to 21,529.38. Australia’s S&P/ASX 200 added 0.5% to 6,700.10. South Korea’s Kospi gained 0.4% to 2,059.44. Hong Kong’s Hang Seng rose 0.5% to 28,248.14, while the Shanghai Composite inched up 0.1% at 2,931.18.
Investors have been mostly pausing ahead of the two days of congressional testimony from Federal Reserve Chair Jerome Powell. Traders will be listening to the exchanges Powell has with lawmakers on Wednesday and Thursday for hints about the Fed’s next move on interest rates.
The market rallied through much of June after the central bank signaled it’s prepared to cut rates to offset slowing global growth and the fallout from U.S. trade conflicts. But an unexpectedly strong U.S. jobs report last Friday has dimmed investors’ expectations.
Many traders still expect the Fed will cut its benchmark rate by a quarter percentage point at the end of the month, but fewer are now expecting a half-point reduction.
The S&P 500 rose 3.68 points, or 0.1%, to 2,979.63. The Dow Jones Industrial Average fell 22.65 points, or 0.1%, to 26,783.49. The Nasdaq composite, which is heavily weighted with technology companies, gained 43.35 points, or 0.5%, to 8,141.73. The Russell 2000 index of smaller company stocks added 1.20 points, or 0.1%, to 1,562.59.
The question is whether the Fed will still see a good argument for cutting interest rates after the strong U.S. June jobs data.
The Fed’s benchmark interest rate currently stands in a range of 2.25% to 2.5% and the central bank has not cut rates since the Great Recession in 2008. Last year, Fed officials raised rates four times, in part to stave off the risk of high inflation and in part to try to ensure that they would have room to cut rates if the economy stumbled.
“The picking up of tech stocks overnight on Wall Street presents a positive lead for Asia markets, though risks persist with the Fed testimony ahead,” said Jingyi Pan, market strategist for IG in Singapore.
“Fed Powell’s testimony will be scrutinized for both his views on the economic situation and guidance in terms of any upcoming moves.”
ENERGY:
Benchmark crude oil added 81 cents to $58.64 a barrel. It gained 17 cents to $57.83 a barrel Tuesday. Brent crude oil, the international standard, rose 60 cents to close at $64.76 a barrel.
CURRENCIES:
The dollar rose slightly to 108.90 Japanese yen from 108.82 yen. The euro was little changed at $1.1209, inching up from $1.1203.
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AP Business Writer Alex Veiga contributed to this report.
