Asian markets slump as Tokyo soars on US interest rate talk

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HONG KONG: Japanese stocks rallied on a weaker yen but other Asian markets retreated on Monday after Federal Reserve chief Janet Yellen hinted at a US interest rate hike by the end of the year.

In a much-anticipated speech on Friday, Yellen said a pick-up in the world’s top economy and an improvement in the jobs market meant “the case for an increase in the federal funds rate has strengthened in recent months.

While there is speculation rates could rise as early as next month, most experts has said that is unlikely and that December or February would be safer bets. Yellen did not give a timeframe during her speech at the annual Jackson Hole symposium of global central bankers, but Fed vice chairman Stanley Fischer later said September was a possibility.

Senior trader at OANDA, Stephen Innes said in a note that after a week of guessing, Dr Yellen left little to the imagination when she stated that the case of a Fed rate hike had strengthened, but remains very much data dependent.

Given the proximity of the granddaddy of all Fed data, the non-farm payroll, it is without question that this week’s print will take on more importance than usual.

Source : Agencies

 

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