The index of Australia’s resource-heavy stocks (.AXJO) went up by 0.81.
SINGAPORE On Thursday, Asian stocks went up because more and more people think that major central banks might start slowing the rate of interest rate hikes in the next few months. At the same time, the dollar’s decline boosted commodities and lowered treasury yields.
MSCI’s broadest index of Asia-Pacific shares outside of Japan (.MIAPJ0000PUS) was up 1.59 percent, on track for its third straight day of gains. About 2% of the index has been lost in the last month.
Australia’s resources-heavy share index (.AXJO) went up 0.81 percent, while Japan’s Nikkei (.N225) went down by 0.09 percent at the start of the day.
Related: Asia’s currency falls after a strong rally; the dollar remains at a one-month low.
On Friday morning, China’s stock market (.SSEC) was up 0.1% and Hong Kong’s Hang Seng Index (.HIS) was up 2.6%.
China stocks have had a rough week, with Monday’s big drop being the worst. This happened because investors around the world were afraid that President Xi Jinping’s new leadership team would put ideology over the economy.
But investors’ growing belief that the Federal Reserve and other central banks might slow their aggressive rate-hike policies has helped calm their nerves and slowed the dollar’s rise.
“Globally, yields are lower because expectations for central bank tightening aren’t going up as much as they were,” said Taylor Nugent, a market economist at the National Australia Bank in Sydney.
Nugent also pointed out that the Bank of Canada announced a smaller-than-expected rate increase of 50 percentage points on Wednesday. He said that this made it more likely that the Fed would switch to rate increases of the same size in December.
Yields on U.S. Treasury bonds went down because the dollar got weaker and people thought the Fed would be less aggressive.
Also, earnings reports from Facebook parent company Meta Platforms Inc (META.O) on Wednesday and Samsung Electronics Co Ltd (005930.KS) on Thursday added to worries of a downturn after some of Europe’s largest banks also warned of growing risks as the economy slows down.
The euro went above $1 in the currency markets for the first time in five weeks, reaching a high of $1.00935. This happened as investors waited for a rate decision from the European Central Bank (ECB). The markets expected the ECB to raise rates by 75 basis points.
Sterling was being bought and sold at $1.1624, down 0.03% from the day’s high of $1.1645.
The yen was worth 0.18 percent more than the dollar at 146.09 per dollar.
Related: Asian Stocks Go Up on Hopes for a Fed Pivot, but Australian Stocks Fall
The fall of the dollar has also helped drive up the price of gold. On Wednesday, spot gold hit a high not seen in two weeks.
After going up by more than 3% the day before, oil prices kept going up in early Asian trading on Thursday.
By 00:15 GMT, Brent crude futures had gone up 25 cents, or 0.3%, to $95.94 per barrel. U.S. West Texas Intermediate (WTI) crude went up 19 cents, or 0.2%, to $88.10.