Global equity markets rose after Janet Yellen, President Obama’s choice to lead the Federal Reserve, signalled the United State central bank’s stimulative monetary policy would remain in place for some time, while the dollar rose to a two-month high against the yen.
Reuters reported that comments interpreted as showing there would be no cut in monetary stimulus any time soon sparked a rally on equity markets and dented the low-yielding yen, which typically falls when investors are looking to take on risk.
Yellen, currently the Fed’s vice chair, defended the US central bank’s steps to spur economic growth and called efforts to boost hiring “imperative” during a hearing on Thursday on her nomination before the US Senate Banking Committee.
“There’s a sincere expectation that monetary policy will be calibrated according to economic conditions,” said Jeff Knight, head of global asset allocations at Boston-based Columbia Management, with $345 billion in assets under management.
US stocks rose, with the Dow and S&P 500 hitting intraday record highs.
The Dow Jones industrial average was up 52.08 points, or 0.33 percent, at 15,928.30. The Standard & Poor’s 500 Index was up 3.54 points, or 0.20 percent, at 1,794.16. The Nasdaq Composite Index was up 5.58 points, or 0.14 percent, at 3,978.32.
US Treasuries slipped as investors chose riskier assets, though the losses were modest. The benchmark 10-year US Treasury note was down 3/32, the yield at 2.7105 percent.
The dollar rose 0.2 percent to 100.25 yen, having hit a high of 100.43 yen that left it the potential to target the September 11 high of 100.60 yen.
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