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Asian shares edge higher ahead of US Fed chief's speech

Asian shares mostly edged higher on Wednesday (Aug 20) following a positive lead from Wall Street, where stocks picked up on encouraging US economic data before a keynote speech this week by the Federal Reserve chief.

HONG KONG: Asian shares mostly edged higher on Wednesday (Aug 20) following a positive lead from Wall Street, where stocks picked up on encouraging US economic data before a keynote speech this week by the Federal Reserve chief.

The dollar hit multi-month highs against the euro and yen after a surge in US housing construction boosted optimism over the state of the world's top economy.

Tokyo ended flat, edging up 4.66 points to 15,454.45 after data showed a rebound in exports helped narrow Japan's trade deficit in July. But the shortfall still came in worse than expected after a marked slowdown in the world's number three economy.

Seoul also ended flat, inching up 1.64 points to 2,072.78 but Shanghai slid 0.23 per cent, or 5.12 points, to 2,240.21. Hong Kong held on to its gains a day after hitting a six-year high, closing up 0.15 per cent, or 36.81 points, to 25,159.76.

Sydney rose 0.19 per cent, or 10.8 points, to 5,634.6, but BHP Billiton's shares slumped almost four per cent as investors fled over the lack of a stock buyback and the global mining giant's demerger plans announced a day earlier.

The incremental gains in Asian markets followed a positive lead from Wall Street, where the Dow Jones Industrial Average finished up 0.48 per cent at 16,919.59 on Tuesday after new upbeat US data. Housing starts in the world's biggest economy jumped 15.7 per cent in July to their strongest level since last November, while new building permits rose 8.1 per cent.

DOLLAR RALLY

The figures would raise hopes for an earlier-than-expected US interest rate hike, which tends to boost the dollar. In late afternoon Asian trade, the greenback rose to ¥103.23 at one stage, its strongest level in four months, and well up from ¥102.91 in New York.

The dollar rally also came ahead of Wednesday's release of minutes from the policy-setting Federal Open Market Committee's last meeting. Analysts will pore over the minutes for signs of whether the Fed might accelerate the timeline for raising rates, now expected in the second half of 2015.

Traders were looking ahead to a speech on Friday by Federal Reserve chief Janet Yellen for any hint of a change to the US central bank's interest rate plans. Last month, Yellen said that the Fed would hold its near-zero interest rate policy until the US economy strengthened, but may raise rates if the jobs market continues to improve.

The euro weakened to nine-month low of US$1.3303 from US$1.3321 in US trade, while it strengthened to ¥137.29 against ¥137.07.

On oil markets, US benchmark West Texas Intermediate for September delivery rose 81 cents to US$95.29 while Brent crude for October eased 12 cents to US$101.44 in afternoon trade. Gold traded at US$1,294.76 an ounce at 1200 GMT compared to US$1,300.30 an ounce late Tuesday.

In other markets:

-- Wellington rose 0.51 per cent or 26.13 points to 5,140.34.

Fletcher Building added 0.88 per cent to NZ$9.17 after a modest full-year result and Chorus was up 0.29 per cent at NZ$1.745.

-- Taipei gained 0.48 per cent, or 44.27 points, to 9,288.05.

TSMC rose 1.21 per cent to NT$125.5 while Acer fell 1.99 per cent to NT$24.65.

-- Manila climbed 0.19 per cent, or 13.74 points, to 7,096.49.

Top-traded Philippine Long Distance Telephone rose 1.60 per cent to 3,302.00 pesos, Energy Development Corp. jumped 4.44 per cent to 7.05 pesos, while Ayala Land inched up 0.60 per cent to 33.35 pesos.

-- Mumbai fell 0.40 per cent or 106.38 points to 26,314.29.

Dena Bank lost 5.06 per cent to 60.10 rupees, while Bhushan Steel fell 4.97 per cent to 137.70 rupees.

-- Bangkok added 0.51 per cent or 7.92 points to 1,550.77.

Telecoms companies were in the vanguard, with Total Access Communication soaring 6.70 per cent to 111.50 baht and True Corp. gaining 6.80 per cent to 11.00 baht.

-- Kuala Lumpur rose 6.73 points, or 0.36 per cent, to 1,878.89.

Malaysia Airlines rose 2.0 per cent to 0.26 ringgit, while SapuraKencana Petroleum added 0.2 per cent to 4.13. Budget carrier AirAsia fell 0.4 per cent to 2.38 ringgit.

-- Jakarta ended up 0.48 per cent, or 25.00 points, at 5,190.17.

Food manufacturer Indofood Sukses Makmur gained 1.07 per cent to 7,075 rupiah, while palm oil firm Wilmar Cahaya Indonesia slipped 1.36 per cent to 1,810 rupiah.

-- Singapore rose 0.22 percent, or 7.22 points, to 3,323.65.

DBS Bank gained 0.40 per cent to S$17.75 while vehicle distributor Jardine Cycle & Carriage advanced 0.09 per cent to S$45.18.

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