WELLINGTON (BLOOMBERG) - Asian stocks climbed on Thursday (April 7), while the US dollar extended losses, after Federal Reserve meeting minutes reaffirmed that US policy makers aren't in a rush to raise interest rates and as the recovery in crude oil prices solidified.
Health-care shares drove the advance in Asia, tracking US pharmaceutical company gains after Pfizer's scuppered deal with Allergan spurred merger speculation in the industry.
Japanese shares reversed earlier losses to rise for the first time in three days, even as the yen held near a 1 1/2-year high, set for its longest rally since January. The Korean won and Malaysian ringgit jumped. Crude rose above US$38 a barrel after jumping 5.2 per cent last session as data showed oil supplies unexpectedly fell from an 86-year high.
The MSCI Asia Pacific Index gained 0.6 per cent as of 9:38 am Tokyo time, as Japan's Topix index rose 0.8 per cent, wiping out an earlier drop of as much as 0.4 per cent.
In Australia, the S&P/ASX 200 Index added 0.5 per cent, while South Korea's Kospi index gained 0.2 per cent, with Samsung Electronics fluctuating after reporting better-than-estimated earnings. New Zealand's S&P/NZX 50 Index climbed 0.3 per cent, rising a second day.
Singapore's Straits Times Index was up 0.44 per cent at 2,823.76 as of 9:41am.
The Fed discussed the relative health of the American economy at its March meeting, in contrast to the persistent risks facing the global outlook. Officials worried that slowing world growth could reduce corporate investment plans and restrain US exports. Traders are assigning zero percent chance of the Fed increasing rates in April, with the odds not topping 50 per cent until its meeting in December.
Oil has swung firmly back to gains with the US stockpiles drop easing concern over the global glut and optimism over a deal between producers to freeze production returning.
"The minutes from the meeting echoed the recent dovish comments by Janet Yellen," James Woods, a global investment analyst at Rivkin Securities in Sydney said in an e-mail to clients. "This is an important moment for the Federal Reserve as it highlights a change in weight given to global growth.
While signs of inflation are picking up, to me it makes sense the FOMC would rather exceed their 2 per cent inflation target than risk pushing the US economy back into recession," he said, referring to the Fed Open Market Committee.
Futures on the Standard & Poor's 500 Index dropped 0.1 per cent early Thursday, following a 1.1 per cent increase in the US benchmark.
The yen ticked up 0.1 per cent as Thursday trading got under way, rising for a fifth day, to 109.74 per dollar. The currency touched 109.34 last session, its strongest level since Oct 31, 2014, as the greenback pulled back after the Fed minutes.
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was down 0.1 per cent after halting a two-recovery Wednesday, dropping 0.3 per cent.