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Most Asian stocks advance on dovish Fed as oil jumps

Singapore  - Most Asian stocks climbed after Federal Reserve meeting minutes reaffirmed US policy makers aren’t rushing to raise interest rates and the yen advanced to a 17-month high as Japanese officials’ expressions of concern failed to halt gains.

Health-care and energy shares drove the advance in Asia, tracking US pharmaceutical company gains. Japanese stocks swung between gains and losses as the yen headed for its longest rally since January. The Malaysian ringgit climbed as crude extended gains following a 5.2% jump last session after US oil inventories unexpectedly fell from the highest level in more than eight decades.

While they discussed the relative health of the American economy at their March meeting, Fed officials contrasted it to the persistent risks facing the global outlook. Traders are assigning zero chance of the Fed increasing rates in April, with the odds not topping 50% until its meeting in December. That sort of outlook is bad for the dollar, with the yen the biggest beneficiary this month among major currencies. Also burnishing market sentiment is oil’s return to gains, with the US stockpiles drop easing concern over the global glut.

“We’ve got a fairly dovish Fed, and combined with the rally in crude, we’re seeing a positive performance in markets,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “Despite what should be an overall risk-on environment, caution remains across the region ahead of the US earnings season.”

Taiwan reported consumer prices rose 2% in March, above expectations of a 1.4% gain. Updates on foreign reserves are due Thursday from China, Australia, Malaysia, Indonesia and the Philippines.

Stocks

The MSCI Asia Pacific Index gained 0.4% as of 13:46 Tokyo time, with health-care stocks jumping 2.2%, led by Japan’s Eisai Co. and Kyowa Hakko Kirin, as well as Korea-listed Celltrion. Pfizer, the biggest US drugmaker, increased 5% on Wednesday, while Allergan - the company it wanted to acquire - rose 3.5%.

In Australia, the S&P/ASX 200 Index added 0.3%, while South Korea’s Kospi index slipped 0.2% as Samsung Electronics Co. fell after reporting better-than-estimated earnings. New Zealand’s S&P/NZX 50 Index climbed 0.2%, rising a second day. The Shanghai Composite Index fell 0.8%, sliding for a second day.

ZTE in Hong Kong fell as much as 16%, the biggest intraday decline in almost nine months, as China’s second-largest maker of telecommunications gear resumed trade for the first time since an investigation by the US government said it violated trade sanctions with Iran.

Futures on the Standard & Poor’s 500 Index were little changed Thursday, following a 1.1% increase in the US benchmark.

Currencies

The yen advanced for a fifth day, by 0.6% to 109.13 a dollar. That’s the longest run of gains in three months and the strongest level since October 2014.

Japan’s currency only briefly erased gains after a ministry of finance official said it would take necessary action if needed and there were one-sided moves in the yen market. Chief Cabinet Secretary Yoshihide Suga made similar comments Thursday during a regularly scheduled press conference.

The Fed meeting records shed more light on officials’ decision to keep rates unchanged last month, after hiking from near zero in December. They showed US policy makers debated an April rate hike, though several officials advocated a cautious approach, partly amid worries that slowing world growth could crimp the US economy’s own expansion.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was down 0.1% after halting a two-recovery Wednesday. Oil’s rally bolstered the ringgit, helping it gain 0.4%.

Commodities

West Texas Intermediate crude added 0.9% to $38.08 a barrel following last session’s jump, which was its steepest one-day gain since March 16. Brent climbed 0.7% to $40.11.

US crude stockpiles fell 4.94 million barrels last week, data from the US Energy Information Administration showed, after analysts predicted a 2.85 million-barrel gain. Refineries processed the most oil in three months as output and imports slipped.

Gold for immediate delivery attempted a rebound, rising 0.4% to $1,226.98 an ounce following Wednesday’s 0.7% retreat.

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