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Nikkei Markets

Asian stocks rise ahead of Fed chief's key speech

China Life Insurance, Anhui Conch among key gainers on A300

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan advanced Friday ahead of a closely watched speech by the U.S. Federal Reserve Chair Jerome Powell.

The Nikkei Asia300 Index of companies outside Japan rose 0.6% to close at 1,233.69.

Later Friday, Powell will likely use his keynote speech at Jackson Hole, Wyoming, to address the uncertainty surrounding the Fed's monetary policy outlook amid U.S. economic data that is holding up quite well and expectations of more easing by the central bank.

Traders have priced in more rate cuts this year despite minutes of the July meeting indicating that future easing would be contingent upon economic data. Futures indicate that traders are pricing in more than a % probability that the Fed will cut the policy rate by at least another 50 basis points from now till December.

Powell himself had indicated after the July meeting that the rate cut was not the beginning of an easing cycle. However, that has not stopped traders from betting on more rate cuts amid worsening U.S.-China trade tensions since and falling Treasury yields.

DBS Bank pointed out that while the market is certain that more rate cuts are coming, at least four Fed officials this week have spoken about the U.S. economy not in need of immediate policy easing, in line with Powell's argument made in July. It warned that in light of this disconnect, there was a possibility that risk assets would see a sell-off ahead of the September Fed meetings "to force the Fed's hand."

In movers on the A300 on Friday, insurer AIA Group rose 2% after reporting a 73.4% jump in net profit for the first half and a 20% year-on-year increase in value of its new business.

China Life Insurance advanced 3.2% following a more than doubling of its first-half net profit. Net written premiums for the six months ended in June were up 4.8%.

Anhui Conch Cement climbed 1.6% after reporting a near 18% increase in first-half net profit and a 56.6% jump in revenue.

Supply-chain and logistics major Li & Fung rose 3% after reporting a profit of $20.5 million for the first half of the year, compared with a net loss of $86.1 million a year earlier.

Hengan International Group slid 3.4%, extending Thursday's 5.3% drop, after the personal-hygiene products maker reported a 3.6% decrease in first-half net profit.

--Nimesh Vora

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