Asian stocks hold on to gains; BoE in focus

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Asian stocks took a breather on Thursday, hovering near their highest in two years as traders waited for more U.S. policy clues, while sterling was steady...

SINGAPORE - Asian stocks took a breather on Thursday, hovering near their highest in two years as traders waited for more U.S. policy clues, while sterling was steady before a Bank of England meeting where rates are expected to remain unchanged.

China left benchmark lending rates unchanged at a monthly fixing on Thursday, in line with market expectations, despite recent showing the economy remains wobbly.The pound was steady at $1.2717 ahead of BoE policy decision and is down 0.2% in June. The frenzy over artificial intelligence has resulted in technology stocks roaring through the year, with Nvidia leading the pack along with select few behemoths as U.S. stocks clock record highs and also boost Asian counterparts.

"The fact remains the market is now all in on the rally in AI-related names and big tech and given the lack of clear immediate risk the path of least resistance is for higher equity index levels." The Japanese yen languished at 158.05 per dollar as the wide difference in the interest rates between Japan and the United States weigh on the currency. The yen is down over 10% against the dollar this year. "I think the best-case scenario is September Fed interest rate cut that narrows the yield differential between dollar and yen", according to Stefan Hofer, chief investment strategist, LGT Bank Asia.

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