Asian stocks rise
Asian stocks rose after new Federal Reserve chief Janet Yellen
pledged "a great deal of continuity" in policy until the US economy
improves.
Markets are also being lifted after US politicians moved to raise the
country's debt limit until March 2015. Wall Street also rallied on the
news, with the S and P 500 index closing 1.1% higher, the Dow adding
1.2%, and the technology-heavy Nasdaq gaining 1%.
Japan's Nikkei 225 rose nearly 1% while Hong Kong's Hang Seng opened
up 0.4%. On Tuesday, Ms Yellen made her first public comments since
taking over from former Fed chairman Ben Bernanke.
In a testimony to the US House of Representatives' Financial Services
Committee, she said the US economic recovery was far from complete.
"By a number of measures our economy is not back, the labour market
is not back, to normal," Ms Yellen said. "There's a great deal of slack
in the labour market still."
Ms Yellen said that there would be no sudden changes to US monetary
policy.
"She did not disappoint the market with her reiteration of
continuity," said Kelly Teoh, an analyst at IG Markets in Singapore.
"That is what the market wanted to hear and the message that the US
economy is on track to recovery."
The US Central Bank has been running a $85 billion (£51.8 billion)
monthly bond-buying program, known as quantitative easing, aimed at
boosting the economy.
However, a Fed spokesman said in December that it planned to scale
back the stimulus program by $10 billion a month.
Investor sentiment was also lifted after the US House of
Representatives passed a motion to suspend the country's debt ceiling
until next year.
This came after House Speaker John Boehner backed down from previous
demands for certain concessions to raise the country's borrowing
authority.
The Senate will vote on the legislation as early as this week.
US Treasury Secretary Jack Lew had warned that the US would run out
of the ability to borrow money later this month.
Global markets have faced significant volatility in recent years
after political infighting brought the US to the brink of defaulting on
its debt obligations.
The stand-off over the debt ceiling also led to the US government to
shut down for more than two weeks last October.
- BBC |