Asian markets are trading cautiously on Wednesday, as the dollar has slightly weakened ahead of decisions from the leaders of the U.S. central bank.
On the Tokyo Stock Exchange, the Nikkei index was up 0.1 percent at 7:30 AM, while stock prices in Hong Kong and Shanghai rose by about 0.2 percent.
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Stock indices in Australia, Singapore, and South Korea fell between 0.1 and 0.2 percent, so the MSCI index of Asia-Pacific stocks, excluding Japan, was almost unchanged compared to yesterday at around 7:30 AM.
Market support comes from yesterday’s new records on Wall Street, where leading indices rose by up to 0.2 percent. However, investors are reluctant to take significant risks ahead of decisions from the U.S. central bank leaders.
A statement following the two-day meeting will be released this afternoon, after which Fed Chair Janet Yellen will address the media.
No one expects an interest rate hike, but investors believe that monetary authorities will announce plans to reduce the accumulated balances of the central bank, i.e., bond sales, and may also signal an increase in the cost of money in December.
Asian investors are also cautious due to rising geopolitical tensions after U.S. President Donald Trump threatened North Korea again yesterday over its provocations.
However, this has not significantly impacted the markets as such messages have become commonplace recently.
Market support is also provided by rising oil prices following news that OPEC and some non-member countries are considering extending the production cut agreement beyond March next year to reduce the excess supply of oil in relation to demand in global markets.
This morning, the price of a barrel in the London market rose by 0.4 percent to $55.40, while in the U.S. market, a barrel increased by 0.75 percent to $49.85.
In the currency markets, the dollar has slightly weakened ahead of Fed decisions. Its index, which shows the value of the dollar against six major world currencies, is around 91.73 points this morning, while it was 91.93 points at the same time yesterday.
Thus, it still fails to significantly move away from 91.01 points, the lowest level since January 2015, which it slid to about ten days ago.
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Against the Japanese currency, the dollar is around 111.50 yen this morning, while it was 111.60 yen at the same time yesterday.
Against the European currency, the dollar has slightly weakened, with the euro exchange rate around $1.2010, while it was $1.1970 at the same time yesterday.
