Asia stocks rise on Yellen and US debt limit optimism

An investor looking at stock boards Asia stocks are set to rise after a strong performance on Wall Street

Related Stories

Asian stocks rose after new Federal Reserve chief Janet Yellen pledged "a great deal of continuity" in policy until the US economy improves.

Markets are also being lifted after US politicians moved to raise the country's debt limit until March 2015.

Wall Street also rallied on the news, with the S&P 500 index closing 1.1% higher, the Dow adding 1.2%, and the technology-heavy Nasdaq gaining 1%.

Japan's Nikkei 225 rose nearly 1% while Hong Kong's Hang Seng opened up 0.4%.

On Tuesday, Ms Yellen made her first public comments since taking over from former Fed chairman Ben Bernanke.

In a testimony to the US House of Representatives' Financial Services Committee, she said the US economic recovery was far from complete.

"By a number of measures our economy is not back, the labour market is not back, to normal," Ms Yellen said. "There's a great deal of slack in the labour market still."

Ms Yellen also stressed that there would be no sudden changes to US monetary policy.

Market Data

Last Updated at 02:21 ET

Market index Current value Trend Variation % variation
Nikkei 225 17795.73 Up 27.43 0.15%
ASX All Ords 5516.60 Up 5.10 0.09%
Hang Seng 24889.80 Up 82.52 0.33%
SSE Composite 3352.96 Down -30.22 -0.89%
SSE SE 50 2522.10 Down -40.26 -1.57%
BSE Sensex 29620.91 Up 342.07 1.17%

"She did not disappoint the market with her reiteration of continuity," said Kelly Teoh, an analyst at IG Markets in Singapore. "That is what the market wanted to hear and the message that the US economy is on track to recovery."

The US central bank has been running a $85bn (£51.8bn) monthly bond-buying programme, known as quantitative easing, aimed at boosting the economy.

However, the Fed announced in December that it planned to scale back the stimulus programme by $10bn a month.

Debt ceiling

Investor sentiment was also lifted after the US House of Representatives passed a motion to suspend the country's debt ceiling until next year.

This came after House Speaker John Boehner backed down from previous demands for certain concessions to raise the country's borrowing authority.

The Senate will vote on the legislation as early as this week.

US Treasury Secretary Jack Lew had warned that the US would run out of the ability to borrow money later this month.

Global markets have faced significant volatility in recent years after political infighting brought the US to the brink of defaulting on its debt obligations.

The stand-off over the debt ceiling also led to the US government to shut down for more than two weeks last October.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories


Business Live

    Via Twitter Rory Cellan-Jones Technology correspondent

    tweets: Amazing Apple quarter: record $18bn profit, 74m iPhones - most profitable product in history? But iPads disappoint

    06:57: Greek euro exit? BBC Radio 4

    Lord Desai says most of the debt Greece owes is to public bodies such as the European Union and IMF. Greece cannot continue to pay off its debts for the next 20 years, he adds, and Greece and Germany have to decide whether they can afford for Greece to leave the eurozone. Anne Richardson of Aberdeen Asset Management points out £8bn of bank deposits have left Greek banks since November because investors see a so-called Grexit as having come "one step closer".

    Via Twitter Stephanie McGovern Breakfast business reporter

    tweets: Morning from the Port of Tyne - where today I'm talking about exports. #economy

    06:44: Greek euro exit? BBC Radio 4
    Greece"s Prime Minister Alexis Tsipras is accompanied by associates

    Now that the Greek election has been won by Syriza, thoughts have begun to turn to negotiations over the country's debts. Greece could request to pay no interest on those debts for about five years, Lord Desai, economist and chairman of the Official Monetary and Financial Institutions Forum, tells Today. "That would save them about 4% of GDP," he says. But, he adds, there "really is no human way that Greece can pay the debt without ruining at least one generation's future."

    06:31: GDP growth Radio 5 live

    Anne Richards, chief investment officer of Aberdeen Asset Management is the markets guest on Wake Up to Money. "You have to be a wee bit careful with quarterly numbers as they are subject to a lot of revision," she says. "The overall picture for the year was reasonably positive." Low construction growth was "a bit worrying." Strong sterling is a drag on GDP growth. Reliance on services rather than making things is also a challenge, she says. More engineers are needed.

    06:20: Apple profit Radio 5 live
    The Apple logo

    The biggest quarterly profit ever for a company: $18bn, has been posted by phone pedlars Apple. Daniel Eran Dilger who writes for AppleInsider tells Wake Up to Money. Apple makes a load of margin from its high-end phones. They also make a lot when you break your power cable and have to splurge £65 on a new one, as presenter Adam Parsons learned earlier this week.

    06:12: Services growth Radio 5 live

    More from Greg Madigan, the boss Subway UK and Ireland on Wake Up to Money. Hospitals, service stations and forecourts, or "non-traditional locations" are a big area of growth for the firm, he says. He used to be an air traffic controller, he adds.

    06:01: Services growth Radio 5 live

    Services is what's propping up GDP growth, we learned yesterday. Greg Madigan, the boss Subway UK and Ireland is on Wake Up to Money. "The price of oil has come down putting more money in peoples pocket... one of the things that benefit from more discretionary spending is food retail," he says. They have 2,000 stores in the UK and Ireland now.

    06:00: Howard Mustoe Business reporter

    Good morning. Keep your thoughts on today's news rolling in via email and on twitter @BBCBusiness

    06:00: Matthew West Business Reporter

    Morning everyone. In case you missed it EDF became the last of the "Big Six" energy suppliers to cut its gas prices last night. And US tech giant Apple reported the largest quarterly profit in corporate history. Today sees trading updates come from Brewin Dolphin, Johnson Matthey, Sage and Anglo American. We'll bring you those numbers and more as we get them.



Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.