On Tuesday, Asian shares hit a high of four months after China’s official PMI survey showing the manufacturing sector managed to continue expanding in March and dovish comments from Federal Reserve Chair Janet Yellen.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose by up to 0.4 percent and reached its highest level since early December. It is widely believed that European shares will gain, with both Britain’s FTSE .FTSE and France’s CAC .FCHI seen rising 0.3 percent. The Nikkei failed to match other indexes and fell 0.2 percent as the Bank of Japan’s tankan survey revealed that Japanese companies are cautious on the economic outlook as a sales tax hike of three percentage points took effect on Tuesday.
Yellen reinforced the need for an “extraordinary” commitment for supporting the U.S. economy. In her first public speech since becoming Fed chair two months ago, the Fed chair remarked here remains “considerable” slack in the economy and job market.
“It seems like she expressed her own dovish ideas. There’s nothing really new and the outlook of the Fed’s policy has not changed that much but the markets like her remarks,” Makoto Noji, senior strategist at SMBC Nikko Securities.
Gold hit a seven-week low of $1,278.34 per ounce, yen slipped to a three-week low against the dollar of 103.44 yen, and the euro bounced back against the U.S. dollar to fetch $1.3774.