Asia stocks jump, Fed refrains from stimulus cut

Published on NewsOK Modified: September 19, 2013 at 12:10 am •  Published: September 19, 2013
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BANGKOK (AP) — Asian stock markets surged Thursday after the U.S. Federal Reserve unexpectedly refrained from reducing its massive economic stimulus.

Not even dour data out of Japan showing a swelling trade deficit could dampen the rally sparked by the Fed's decision to keep in place its $85 billion in monthly bond purchases, part of its "quantitative easing" approach of pumping money into the financial system to help stimulate the U.S. economy.

Investors had braced themselves for a slight reduction in monthly bond purchases. Instead, the Fed, at the end of its two-day policy meeting Wednesday, announced no timetable for winding down the stimulus and even threw in a note of caution: the U.S. still has not attained adequate levels of job and economic growth.

"Employment growth has been very weak ... Private sector GDP growth is slowing, not accelerating," analysts at DBS Bank Ltd. in Singapore said.

Investors ignored the Fed's cautious tone and instead cheered the retention of the stimulus program, which has helped bolster global stock markets.

The Nikkei 225 in Tokyo rose 1.4 percent to 14,701.68, even though government data showed a bigger-than-expected gap in trade. Imports, boosted by higher fuel costs, rose 16 percent from a year earlier to 6.74 trillion yen ($68.7 billion) while exports gained 14.7 percent to 5.78 trillion yen ($58.9 billion).

Australia's S&P/ASX 200 added 1 percent to 5,290.50. Benchmarks in Indonesia, Thailand and the Philippines all jumped by more than 3 percent. India and Singapore also posted solid gains. Markets in South Korea and mainland China were closed for public holidays.

Hong Kong's Hang Seng advanced 1.7 percent to 23,512.12. The benchmark index was led higher by blue chip property stocks, which rose on expectations that interest rates would remain low, said Linus Yip, strategist at First Shanghai Securities in Hong Kong.

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