Asian markets gain, investors anxious for U.S. rate hike clues

Asian share markets were broadly positive while the dollar was slightly weaker on Thursday, with investors nervously awaiting the U.S. Federal Reserve’s annual Jackson Hole conference for clues on how sharp future interest rate hikes might be.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) edged up 0.3%, after U.S. stocks ended the previous session with mild gains.
Australian shares (.AXJO) climbed 0.7%, while Japan’s Nikkei stock index rose 0.52% (.N225) and China’s CSI300 (.CSI300) advanced 0.27%.
The Federal Reserve’s annual monetary policy conference in Jackson Hole, Wyoming is due to start on Friday.
Investors now expect the Fed Funds rate to peak at 3.80% in March 2023, up from 3.62% a fortnight ago, said Tapas Strickland, NAB’s economics director.
“Market moves at least are consistent with the hawkish pushback seen by Fed officials over recent weeks,” he added.
Interest rate futures imply a 60% chance of a 75 basis point Fed hike in September.
In early Asian trade, the yield on benchmark 10-year Treasury notes rose to 3.1095% compared with its U.S. close of 3.106% on Wednesday.
The two-year yield , which rises with traders’ expectations of higher Fed fund rates, touched 3.4028% compared with a U.S. close of 3.386%.
The yields had also made gains overnight, though that did not stop U.S equity markets rising on Wednesday.
The Dow Jones Industrial Average (.DJI) closed up 0.18%, the S&P 500 (.SPX) gained 0.29% and the Nasdaq Composite (.IXIC) advanced 0.41%.
The dollar edged 0.01% lower against the yen to 137.09 . It is still some distance from its high this year of 139.39 in mid-July.
The European single currency was flat during early Asian trade at $0.9968, having lost 2.45% in a month.-Agencies