Asian shares soared to their highest level in nearly two years after the Federal Reserve signaled its commitment to three interest-rate cuts this year despite a slight increase in inflation. The regional stocks gauge reached a level last seen in April 2022, driven by substantial gains in technology firms listed in Hong Kong and South Korea, following a robust revenue forecast from Micron Technology Inc., which reflected increased demand induced by artificial intelligence.
From Australia to Japan, broader benchmarks recorded gains, with Japan’s Nikkei 225 poised for a fresh closing high after the nation’s exports grew for the third consecutive month. However, mainland Chinese stocks experienced fluctuations after an initial surge.
Tony Sycamore, a strategist at IG Australia, described the market sentiment in Asia as a “magnificent sea of green,” attributing the optimism to relief over the Fed’s decision and the seeming placation of US yields. He noted a renewed focus on technology and the excitement surrounding advancements in artificial intelligence.
Federal Reserve policymakers maintained their outlook for three rate cuts in 2024 and signaled a slowdown in reducing their bond holdings, indicating a lack of concern over the recent uptick in price pressures. This stance provided further reassurance to investors and contributed to the positive momentum in Asian markets.
