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Asian Stocks Up Despite Impending Fed Tapering and Unending China Evergrande Woes By Investing.com

by Mike Robinson

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© Reuters

By Gina Lee

Investing.com – Asia Pacific stocks were mostly up on Thursday morning, with investors digesting the prospect that the U.S. Federal Reserve could begin asset tapering as soon as November 2021.

China’s rose 1.05% while the was steady at 14,277.08 by 9:44 PM ET (1:44 AM GMT). China Evergrande Group’s (HK:) debt crisis continues to be on investors’ radars, even as some concerns were eased after it issued a vaguely worded statement on a local bond interest payment. However, questions remain about the developer’s $300 billion of liabilities and the payment due on a dollar note.

Hong Kong’s jumped 2.10%.

South Korea’s was down 0.56% and in Australia, the rose 1.07%.

Japanese markets were closed for a holiday, but the kept its interest rate steady at -0.10% on Wednesday.

U.S. Treasury bills with shorter maturities declined while those with longer maturities rose. Due to Japan’s holiday, cash Treasuries trading won’t take place Thursday.

The Fed could begin scaling back asset purchases in November 2021 and complete the process by mid-2022, Chairman Jerome Powell said as the on Wednesday. After the tapering has been completed, Powell said the Fed could also increase interest rates.

Fears about China Evergrande, alongside the Fed’s shift away from its dovish stance, have led to market volatility about a slowing economic recovery from COVID-19. However, investors remain optimistic.

“The Fed has got to be pleased that their communication on the longer way to asset tapering has avoided the dreaded fear of the tantrum,” BlackRock Inc (NYSE:). Jeffrey Rosenberg is a senior portfolio manager responsible for systematic fixed-income.

“The flatter curve is kind of an initial response. Yes, the curve is flatter, but you’ve got to squint to see that market reaction. This is a very good outcome for the Fed in terms of signaling their intent to give the market information well ahead of the asset tapering decision.”

Powell, Fed Governor Michelle Bowman and Fed Vice Chairman Richard Clarida will discuss the economic recovery from COVID-19 on Friday.

Meanwhile, the hands down its policy decision later in the day.

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