Another twist in the tale?


Asian shares rose on Wednesday and the euro clung to most of the previous session’s gains as investors bet that Europe’s worsening debt crisis and faltering global growth will prompt major central banks to launch a new round of monetary stimulus. The U.S. Federal Reserve concludes a two-day policy meeting later, with expectations high that the central bank will extend its bond-buying programme dubbed “Operation Twist”.
MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.4 percent, while Japan’s Nikkei share average climbed 0.8 percent, though U.S. stock futures pointed to a slightly weaker open on Wall Street.
“The market is waiting for the outcome of the Fed meeting, and many expect some kind of easing steps,” said Yutaka Miura, senior technical analyst at Mizuho Securities in Tokyo. “If they’re disappointed, U.S. stocks would fall, so that risk will likely keep the market here from pushing the upside too far.”
The liquidity hit provided by previous doses of Fed stimulus has lifted riskier assets, and financial markets have become highly sensitive to expectations of further moves, with global equities and commodities tending to rise and the dollar coming under pressure when action is seen as increasingly likely.
U.S. stocks rose around 1 percent on Tuesday, and industrial metals and the euro also gained ground.