Asian shares up as traders await Fed rate hikes

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Asian shares up as traders await Fed rate hikes

The broadest index of Asia-Pacific shares outside Japan went up by 0.56 percent to 555.81.

Australia was closed for a holiday on Thursday, so trading was a bit skewed.

After the Bank of Canada became the first central bank to say it would hold off on further increases on Wednesday, traders were betting that the US Federal will soon tone down its aggressive rate hike policy.

After a series of supersized rate hikes last year, the US central bank is expected to raise rates by a smaller 25 basis point next week on signs that inflation is cooling.

The US GDP release will be a key interest for the market to gauge whether the market expectations are shifting in favor of a soft landing rather than a recession, according to Saxo strategists.

The prospect of a less aggressive pace in monetary tightening has stoked expectations of a so-called soft landing a scenario in whichinflation eases against a backdrop of weakening but resilient economic growth.

The S&P 500 ended lower overnight, despite the weak corporate earnings so far, which has revived concerns about the economic impact of the Fed's restrictive policy.

Boeing Co reported a wider loss for 2022 on weakness in its defense unit as it warned of further supply chain issues, with the US planemaker missing Wall Street expectations on revenue and earnings per share in the final quarter of the year.

Investors are looking for clues as to when the central banks are likely to turn dovish at the Bank of England and European Central Bank meetings next week.

The dollar index that measures the US currency against six major rivals was at 101.57, not far from the eight month low of 101.51 it touched last week.

The Japanese yen was up 0.32 percent to 129.19 per dollar, while sterling was last trading at $1.2407, up 0.06 percent on the day.

The yield on 10 year Treasury notes was down 1.7 basis points at 3.445 percent, while the yield on the 30 year Treasury bond was down 2.2 basis points at 3.602 percent.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two and 10 year Treasury notes seen as an indicator of economic expectations, was at 68.8 basis points. The inversion of this curve predicted eight of the last nine recessions, analysts said.

The two-year USTreasury yield, which usually moves in step with interest rate expectations, was down 0.6 basis points at 4.131 percent.

US crude prices went up 0.42 percent to $80.49 per barrel and Brent at $86.24, up 0.14 percent on the day, as US crude stocks rose less than expected.

On Thursday, gold prices hit a nine-month high, with spot gold flat at $1,946. It hit its highest level since April 2022, and it has now hit 73 per ounce.