Stocks struggle after Fed shift, Japanese markets shaken as Abe resigns | Malay Mail

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LONDON, Aug 28 — Stock markets struggled for direction today as investors worried about a lack of detail in the US Federal Reserve’s policy shift while Japanese markets were roiled as Prime Minister Shinzo Abe resigned for health reasons. The Fed’s widely-awaited shift in its policy...

Friday, 28 Aug 2020 05:50 PM MYT

The Fed’s widely-awaited shift in its policy framework, unveiled yesterday, saw the central bank place more emphasis on boosting economic growth and less on worries about letting inflation run too high. The policy aims for 2 per cent inflation on average so that too low a pace would be followed by an effort to lift inflation “moderately above 2 per cent for some time.”

“It’s not so much about what to do about inflation when it comes but about getting inflation above target. The challenge is to get inflation up to target and not very much was said about that,” said Colin Asher, a senior economist at Mizuho. Japanese shares dropped, with the Nikkei 225 down 1.4 per cent. Abe resigned on Friday because of a chronic health condition, saying he would stay as prime minister until a new leader was appointed.Asian shares outside of Japan limped higher, with the MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 0.19 per cent.

The euro seized on the dollar’s weakness to gallop another 0.7 per cent higher and was last at US$1.1905 , close to a more than two-year high it recently touched.

 

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