Asian stock markets rallied on Tuesday as investors took heart from reassuring comments by Federal Reserve Chair Janet Yellen on the strength of the U.S. economy.
Japan’s Nikkei 225 rose 0.6 percent to 16,675.45 while South Korea’s Kospi gained 1.3 percent to 2,011.63. Hong Kong’s Hang Seng Index advanced 1.4 percent to 21,329.95. Australia’s S&P/ASX 200 rose 0.2 percent to 5,371.00. Stocks in Taiwan, Singapore and Indonesia also rose. The Shanghai Composite Index in mainland China turned 0.1 percent higher at 2,936.04.
In a speech Monday, Federal Reserve Chair Janet Yellen stressed that the U.S. economy appears fundamentally solid despite a jobs report for May released Friday that showed the weakest monthly gain in more than five years. She noted that other gauges of the job market have been more positive and shied away from sketching any timetable for when the Fed might raise interest rates again because of myriad uncertainties.
“Federal Reserve chair Yellen was cautious in her remarks on the shocking payrolls reading, which reinforced that June is not the month to make a move. The slightly dovish remarks sat well with financial markets, prompting a rally in equities,” said Bernard Aw, a market strategist at IG in Singapore. “While the message Yellen wants to [put] across is that she still wants to move rates higher, the timing of subsequent rate hikes is murky.”
U.S. stocks jumped on Monday. The Dow Jones industrial average gained 0.6 percent to 17,920.33. The S&P 500 rose 0.5 percent to 2,109.41. The Nasdaq composite index gained 0.5 percent to 4,968.71.
Benchmark U.S. crude oil gained 2 cents to $49.71 per barrel in electronic trading on New York Mercantile Exchange. The contract rose $1.07, or 2.2 percent, to $49.69 a barrel on Monday, its highest closing price this year. Brent crude, which is used to price international oils, added 9 cents to $50.65 a barrel in London.
The dollar rose to 107.68 yen from 107.52 yen while the euro rose to $1.1371 from $1.1357.