Asian stocks rose Wednesday amid a recovery in U.S. shares spurred by the corporate earnings outlook and signs that Federal Reserve officials favor measured monetary-policy tightening.
Equities advanced in Japan and Australia, among the few markets open in Asia due to the Lunar New Year holiday. U.S. Treasuries were little changed and a dollar gauge held a retreat.
European and U.S. equity futures pushed higher, with contracts on the technology-heavy Nasdaq 100 up over 1% after strong earnings from Alphabet Inc. and Advanced Micro Devices Inc. U.S. stocks on Tuesday posted their best three-day rally since 2020.
Oil steadied near a seven-year high ahead of a meeting of OPEC and its allies on boosting output. Gold fell below US$1,800 an ounce. Bitcoin traded around the highest level in two weeks.
The latest Fed commentary hinted at a calibrated approach to raising interest rates to fight high inflation, potentially soothing some investor worries that the economy will take a hit from tighter monetary policy. Those concerns have whipsawed markets this year, leaving global stocks in the red.
None of six Fed officials speaking so far this week have backed the idea of a half-point rate increase in March, and the most aggressive, James Bullard, president of the St. Louis Fed, said five hikes -- one more than every quarter -- is "not too bad a bet."
"Fed tightening is still the path forward," said Dennis DeBusschere, founder of 22V Research. "But a short term rebound in equities will continue -- led by growth and cyclicals -- as investors focus on a narrative of 'peak tightening' ahead of what is likely to be a weak payroll report."
Officials have lowered expectations for this week's U.S. payrolls report, saying that brief absences of workers due to the omicron coronavirus strain could overstate the number of unemployed people for last month.
Buy the Dip?
The latest U.S. data on manufacturing and job openings showed a resilient economy that the Fed is trying to cool.
"Stocks probably have a little further to move on the downside before they find a bottom," Carley Garner, founder of DeCarley Trading, said on Bloomberg Television. But she added "2022's going to be probably the year to buy any big dip across the board in anything: Treasuries, stocks, commodities, everything."
Elsewhere, Australia's central bank governor said the monetary authority will do what is necessary to maintain low and stable inflation, indicating that policy makers will act should prices accelerate too sharply. The local dollar ticked up.
Traders are continuing to monitor tension between the U.S. and Russia over Ukraine. Western officials say Russia has massed more than 100,000 troops near the Ukraine border. Diplomatic talks showed little sign of a breakthrough.