Stock market: Asia rises in the wake of Wall Street. Oil prices still down

Asian markets were mostly up, following Wall Street and the fall in oil prices. The Tokyo Stock Exchange closed higher. The Nikkei, the index of 225 leading shares, gained 1.38 per cent to reach 65,018.95 points, after the Bank of Japan raised interest rates from 1.0 per cent to 1.25 per cent, the highest level in 31 years.

The move had been widely anticipated, coming after the Federal Reserve had raised its key interest rate this week. The United States has been putting pressure on Japan to raise interest rates due to concerns about the weakening of the yen. The two countries have recently taken joint action to prop up the yen. However, these efforts have not had much of an impact. In the foreign exchange market, the US dollar rose to 157.11 Japanese yen from 155.95 yen. The euro rose to 1.1487 dollars from 1.1480 dollars.

South Korea’s Kospi index jumped by 2.3% to 6,866.83. Australia’s S&P/ASX 200 index remained virtually unchanged, falling by less than 0.1% to 8,731.50. Hong Kong’s Hang Seng index rose by almost 0.7% to 24,769.80, whilst the Shanghai Composite gained 1.0% to close at 3,916.08.

The fall in oil prices and the easing of pressure from the bond market helped Wall Street recoup most of the losses it had suffered the previous day. The S&P 500 index jumped by 1.1 per cent, marking its second rise in the last nine days. The Dow Jones Industrial Average gained 316 points, or 0.6 per cent, whilst the Nasdaq Composite Index rose by 1.7 per cent.

In Asian trading, Brent, the international benchmark, fell by 0.94 per cent to $103.83 per barrel. The US benchmark crude fell by 0.83 per cent to $101.06 per barrel. Brent is still more expensive than the $72 per barrel seen at the start of the summer, but the recent fall has helped to drive down yields on the bond market and partially ease the pressure on equities. The yield on ten-year Treasury bonds fell to 4.93 per cent from 5.01 per cent recorded late on Wednesday evening.