Aug. 10 - Asian stocks rebound on Wednesday after the U.S. Federal Reserve makes an unprecedented pledge to keep interest rates near zero for at least two years. Toshi Maeda reports.
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Asian stocks clawed back some lost ground on Wednesday (August 10) after Wall Street's best showing in 3 years.
The rebound came after the U.S. Federal Reserve made an unprecedented pledge to keep interest rates near zero for at least two years.
Still, investors remain wary about the implications of the Fed's move, which suggests it expects the U.S. economy to remain weak far longer than previously forecast.
Japan's Nikkei closed up 1 percent, while Asia Pacific shares' index outside Japan gained nearly 3 percent, led by the materials sector.
Australian shares rallied 2.6 percent, with banks and miners leading the pack, encouraged by above-forecast exports from China.
Royal Bank of Scotland Chief Economist Junko Nishioka said the Fed's decision could lead to the yen's further appreciation, making Japanese exporters suffer.
(SOUNDBITE) (English) ROYAL BANK OF SCOTLAND CHIEF ECONOMIST JUNKO NISHIOKA, SAYING:
"I do believe that the Fed's decision yesterday has an impact on the dollar-yen; I mean that the dollar is likely to decline further, and then that it means that the Japanese economy is going to face a very serious condition and face the further appreciation of Japanese yen."
The dollar fell into the 76-yen range on Wednesday (August 10), not far from the all-time low of 76.15 yen reached, before an G7 intervention in mid-March.
Citigroup strategist Daniel Lam says because the Fed did not outline specific plans to revive the U.S. economy, China and especially India remain his investment choices, as relative growth plays.
SOUNDBITE (English) CITI'S PAN-ASIA MULTI-STRATEGIST, DANIEL LAM, SAYING:
"What they haven't done is to come up with a concrete plan on how they're going to stimulate the (U.S.) markets. All they said is that they're keeping all their options open, they are considering all the measures, but they haven't come up with any plans."
Data released Wednesday shows China's exports were surprisingly buoyant in July as shipments to Europe jumped by the most in more than a year.
The 20 percent rise in China's exports allayed concerns that debt problems abroad may hold back the world's No. 2 economy.
Meanwhile, gold ticked higher, hovering near a lifetime high around $1,778 an ounce hit in the previous session.
The precious metal was held back by the rebound in equities, but still likely to find support from on-going global economy fears.
Toshi Maeda, Reuters.
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