US rally sends Asia higher, but Tokyo slumps on weak dollar
TOKYO (AP) Asian stocks were mixed in early Thursday trading, as Tokyo slumped over the U.S. Fed statement overnight that has reversed a recent trend for a strong dollar, while the rest of the region was cheered by a surge on Wall Street that followed.
KEEPING SCORE: Japan's benchmark Nikkei 225 slipped 0.7 percent to 19,418.38 in morning trade. A weak yen has been a boon for the nation's giant exporters. South Korea's Kospi added 0.4 percent to 2,037.35 and Hong Kong's Hang Seng jumped 1.2 percent to 24,419.55. Other Asian bourses were also higher, including Taiwan, Singapore, Indonesia and the Philippines.
WALL STREET: The Standard & Poor's 500 index rose 25.22 points, or 1.2 percent, to 2,099.50, after the release of a statement from the Federal Reserve that gave a cautious outlook on the U.S. economy. The Dow Jones industrial average gained 227.11 points, or 1.3 percent, to 18,076.19. The Nasdaq composite rose 45.39 points, or 0.9 percent, to 4,982.83.
THE FED EFFECT: The statement from U.S. Federal Reserve Chair Janet Yellen took investors by surprise, and interest rates are now expected to head higher but at a slower pace than previously thought. The Fed has held its benchmark interest rate close to zero since 2008. Low rates make it easier for businesses and consumers to borrow and spend, but it also tends to weaken that nation's currency.
ANALYST TAKE: "Yellen highlighted the strong dollar as one reason for slower exports," said Chang Wei Liang, of Mizuho Bank in Singapore. "The big surprise yesterday was that the Fed acknowledged the negative impact stemming from the strong U.S. dollar."
TUNISIA WORRIES: A militant attack on a museum in Tunisia's capital has set off some worries about global stability. The attack killed 19 people in the deadliest attack on civilians in the North African country in 13 years. Two gunmen were slain by security forces.
ENERGY: Benchmark U.S. crude sank 58 cents to $44.08 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, dipped 21 cents to $55.70 a barrel.
CURRENCIES: Prospects of a slower pace in the rise of U.S. interest rate have sent the dollar lower against other currencies. The dollar cost 120.21 yen, down from 120.23 yen. The euro was little changed at $1.0805.