Tokyo, Japan (BBN) – Banks led broad gains in global stocks after Janet Yellen said the Federal Reserve doesn’t need to wait for the Trump’s administration’s plans on fiscal stimulus to hike rates.
The dollar held gains and bonds dropped, reports Bloomberg.
Equities from Tokyo to Sydney rose after four major American equity benchmarks closed at unprecedented levels for a second day.
Chinese stocks in Hong Kong jumped the most in almost three months after record new credit fueled optimism about the strength of the economy.
The yield on the 10-year Treasury note is up for a fifth day and the dollar is strengthening against most major currencies after the Fed chair said waiting too long to raise rates could disrupt financial markets.
Trump reflation trades were back in vogue after Yellen’s comments, with odds for an increase in US borrowing costs next month climbing to 34 per cent.
Inflation data Tuesday from China to America showed accelerating price gains at factories, bolstering the case for tightening before a reading on US consumer price data Wednesday.
The Bloomberg Dollar Index rose less than 0.1 per cent, on course for a five-day advance, as of 11:44 am in Tokyo.
The yen fell less than 0.1 per cent to 114.34 per dollar, after a two-day, 0.9 per cent slide.
The MSCI All-Country World Index climbed 0.2 per cent to 442.11, the highest level since May 2015 and approaching an all-time closing high of 442.70.
The Hang Seng China Enterprises Index gained as much as 1.8 per cent.
Agricultural Bank of China Ltd. surged 4.4 per cent.
Bank of China Ltd. and Industrial & Commercial Bank of China Ltd. advanced more than 2 per cent.
The Topix index rose 1.1 per cent.
Australia’s S&P/ASX 200 Index added 1 per cent.
South Korea’s Kospi increased 0.4 per cent.
The S&P 500 Index rose 0.4 per cent on Tuesday, for a sixth straight gain.
Financial shares in the gauge jumped 1.2 per cent to the highest since December 2007.
Australian 10-year yields jumped five basis points to 2.78 percent, after rates on similar-dated Treasuries rose three basis points the prior session.
The yield on 10 year Treasuries climbed one basis point to 2.48 per cent.