Asian Stocks Up as Fed Comments Ease Investors’ Inflation Concerns By Investing.com

By Gina Lee

Investing.com – Asia Pacific stocks were up Tuesday morning as investors eased concerns about the runaway inflation. gained following last week’s slump.

Japan’s gained 0.70% by 11:23 PM ET (3:23 AM GMT) after said on Monday the world’s recovery from COVID-19 was uneven and pledged to keep monetary policy ultra-loose.

Meanwhile, Japan is planning to extend the state of emergency against COVID-19 in nine prefectures, including Tokyo, as the number of COVID-19 cases continues to increase. The U.S. State Department also to level four in response.

South Korea’s rose 0.85%, with the due to hand down its May policy decision on Thursday.

In Australia, the was up 0.53%. The country’s second-largest city Melbourne has restricted gatherings as it deals with its latest COVID-19 outbreak.

Hong Kong’s rose 1.29%. China’s rose 1.66% while the jumped 1.67%.

U.S. Federal Reserve officials, including Governor Lael Brainard, Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard, reiterated that any inflation was temporary.

said on Monday that the central bank is not ready to pare back its stimulus measures, and expected inflation is to rise above 2% in 2021 and into 2022.

“We’re not quite there yet, I think we will get there in the months ahead… II think there will come a time when we can talk more about changing the parameters of monetary policy, I don’t think we should do it when we’re still in the pandemic,” Bullard told Yahoo Finance.

While the comments eased concerns about the runaway inflation, some investors remain worried that the Fed could be forced to change its current dovish policy earlier than expected should inflationary pressure build-up.

“Inflation is a key focus for investors, meaning uncertainty over what happens to interest rates,” Chris Ingo, chief investment officer of core investments at AXA Investment Managers, said in a note.

“Yield curves have stabilized, but it is not clear that renewed inflation concerns automatically mean steeper curves,” the note added.

Investors now await the release of the , the Fed’s preferred method of measuring inflation, on Thursday.

On the central bank front, the will hand down its policy decision later in the day, with the following a day later.