Global Markets Asian stocks cautious, take comfort from Yellen's comments

by **Cals** Fri 28 Feb 2014, 14:24

Global Markets Asian stocks cautious, take comfort from Yellen's comments

Business & Markets 2014

Written by Reuters

Friday, 28 February 2014 08:20

TOKYO (Feb 28): Asian stocks were steady on Friday, tracking gains on Wall Street after U.S. Federal Reserve Chair Janet Yellen's comments reiterated her confidence in the U.S. economy.

Yellen's testimony to a Senate committee helped the S&P 500 shrug off fears of rising tension in Ukraine and Russia and close at a record high.

MSCI's broadest index of Asia-Pacific shares outside Japan held steady, while Australian shares were up 0.1 percent.

Yellen said the Fed will continue to determine whether recently severe winter weather was behind recent signs of weakness, and reemphasised that it would take a "significant change" to the economic outlook to sway the Fed from its plans to taper its quantitative easing (QE).

"Her openness bolstered risk appetite because it assures a gradual course of tapering by the central bank with the only risk being a smaller and not larger reduction," BK Asset Management managing director Kathy Lien said in a note to clients.

"Nonetheless, her comments that QE will end in the fall is also worth noting because it indicates that for the time being, the Fed doesn't see anything that would change the current pace of tapering," Lien added.

An unexpected rise in U.S. durable goods orders, excluding transportation, also helped distract investors from an increasingly unstable situation in Ukraine.

Armed men seized the parliament in Ukraine's Crimea region on Thursday and raised the Russian flag.

Fighter jets along Russia's western borders were on combat alert, the Defence Ministry was quoted as saying on Thursday by Interfax news agency.

The unrest prompted investors to seek the safety of U.S. Treasuries, pushing yields to two-week lows. The yield on the 10-year note was 2.642 percent in Asia, steady from its U.S. close on Thursday.

The dollar fought its way back against the yen, edging up about 0.1 percent to 102.17 yen after the Japanese unit's traditional safe-haven appeal in the face of the Ukraine developments helped push the greenback to a one-week low of 101.70 yen on Thursday.

The euro was nearly flat on the day at $1.3707, pulling away from the previous session's two-week low of $1.3641.

It inched up slightly against the yen to 140.05, stepping away from a more than two-week low of 138.75 yen touched on Thursday.

In commodities trading, gold prices were flat with spot gold trading at $1,330.50.

Oil slipped, with Brent crude down about 0.7 percent at $108.77 a barrel and U.S. oil down 0.3 percent at $102.07.