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Asian markets expected to digest Yellen comments as Wall Street closes up; dollar slips overnight

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Futures pointed to a mixed open in Asia on Thursday as markets parsed through Federal Reserve Chair Janet Yellen’s comments.
Futures pointed to a mixed open in Asia on Thursday as markets parsed through Federal Reserve Chair Janet Yellen’s comments during her testimony before congress.
Yellen said Wednesday the central bank would proceed with the unwind of its balance sheet this year, but that it was paying close attention to inflation data. Yellen’s comments about how it was “premature” to determine if the U. S. economy was on track for 2 percent inflation was interpreted by market watchers as dovish.
Yields of the benchmark 10-year U. S. Treasury fell from around 2.35 percent to 2.31 percent during Yellen’s testimony before later turning to around 2.32 percent.
Meanwhile, the dollar index traded at 95.761 at 6: 50 a.m. HK/SIN, off a low of 95.511 hit overnight — its lowest level since June 30. The greenback also slid against the yen, with the dollar fetching as little as 113.12 yen overnight compared to levels around 113.95 seen in the prior session. The dollar later recovered some of its losses to trade at 113.25 yen.
“Investors have been skeptical of the Fed’s hawkishness in the days leading up to Janet Yellen’s testimony and when she failed to sufficiently emphasize the improvements in the economy, the dollar U-turned as the bulls abandoned their trades quickly, ” BK Asset Management Managing Director of FX Strategy Kathy Lien said in a note.
Over in Asia, futures tipped a higher open for Japanese equities. Nikkei futures traded in Chicago were up 0.38 percent at 20,175 and Osaka futures 0.16 percent higher at 0.16 percent. The Nikkei 225 closed at 20,098.38 on Wednesday.
Australian SPI futures were off 0.38 percent at 5,652 compared to the benchmark index’s last close of 5,673.831.
Wall Street cheered Yellen’s comments on future rate hikes as major indexes closed higher, with the Dow closing up 0.57 percent, or 123.07, at a record 21,532.14. The S&P 500 gained 0.73 percent, or 17.72 points, at 2,443.25 and the Nasdaq jumped 1.1 percent, or 67.87 points, at 6,261.17.
In currencies, the Canadian dollar rose to its highest levels in more than a year after the Bank of Canada raised interest rates by a quarter of a percentage point on Wednesday. The greenback fetched as little as 1.2740 Canadian dollars overnight compared to the 1.2920 Canadian dollars seen in the prior session.
Ahead, markets awaited China trade data for the month of June, which was expected at 10: 00 a.m. HK/SIN.
Several central banks were set to take center stage on Thursday, with the Bank of Korea expected to release its interest rate decision at 9: 00 a.m. HK/SIN. Malaysia’s central bank is set to do the same at 3: 00 p.m. HK/SIN.

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