next month, keeping the dollar near three-week highs.
Spreadbetters saw
the boon for equities continuing in Europe, predicting a higher open for
Britain's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI.
Yellen said on
Tuesday the Fed would probably need to raise interest rates at an upcoming
meeting, and that delaying rate increases could leave the central bank's
policymaking committee behind the curve.
MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.9 percent,
rising to its highest since July 2015.
Australian stocks
climbed 0.9 percent, South Korea's KOSPI .KS11 tacked on 0.5 percent and Hong
Kong's Hang Seng .HSI advanced 1.4 percent. Japan's Nikkei .N225 added more
than 1 percent, buoyed by a weaker yen.
"The market
took heart from Yellen's comments and such positive sentiment will likely last
throughout the day," said Takuya Takahashi, a strategist at Daiwa
Securities.
Yellen's remarks
helped push Wall Street indexes to record highs overnight by boosting U.S. bank
stocks.
"Fundamentally,
the U.S. banks are simply being used as a vehicle to express reflation and
'Trumponomics'," wrote Chris Weston, chief market strategist at IG in
Melbourne.
"Although last
night really belonged to Janet Yellen whose prepared comments that waiting too
long to tighten would be 'unwise' and a further review of its policy stance
will take place at its upcoming meetings."
In currencies, the
dollar index against a basket of major currencies stood at 101.220 .DXY, near a
three-week high of 101.380 scaled overnight following Yellen's comments.
Yellen's remarks
rekindled prospects in some quarters for the Fed to raise rates three times in
2017 rather than twice. The futures market, however, did not exactly share such
a view amid lingering doubts toward the U.S. economy's ability to sustain three
rate increases.
According to CME
Group's FedWatch data, the chance for the Fed implementing at least three rate
increases in 2017, as implied by U.S. interest rate futures FFZ7, stood at
around 30 percent, little changed from the previous day.
The greenback was a
shade higher at 114.400 yen JPY= after rising to a two-week high of 114.500 the
previous day. The euro was virtually flat at $1.0579 EUR= after slipping to a
one-month trough of $1.0561 overnight.
The dollar was
supported as U.S. Treasury yields rose on the Fed Chair's comments, with the
benchmark 10-year note yield US10YT=RR climbing about four basis points to an
11-day high the previous day.
The South Korean won
slipped early against the dollar but managed to trim a bulk of its losses.
Other emerging market currencies such as the Thai baht, Singapore dollar and
Malaysian ringgit also eased earlier but retraced most of their losses.
The stronger dollar,
which puts non-U.S. buyers of dollar-denominated commodities at a disadvantage,
weighed on crude oil prices.
U.S. crude CLc1 was
down 0.7 percent at $52.83 a barrel and Brent shed 0.6 percent to $55.64 a
barrel LCOc1. Crude already came under pressure the previous day on evidence of
surging U.S. stockpiles. [O/R]
Spot gold XAU= was
off 0.15 percent at $1,225.91 an ounce. [GOL/]
Copper on the London
Metal Exchange CMCU3 rose 0.8 percent to $6,068 a tonne. The metal has enjoyed
support recently following a strike at the world's biggest copper mine in Chile
that took it to a 1-1/2-year high above $6,200 a tonne on Monday. [MET/L]
*REUTERS*
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