Asian shares rise as investors await Yellen testimony

Patrick Watson probes Janet Yellen's bold statement on financial crises and makes a suggestion about what she might

A higher USA currency makes dollar-denominated commodities more expensive for holders of other currencies, which could subdue demand.

The market was looking ahead to Wednesday and Thursday as Yellen will deliver two days of testimony on the USA central bank's semi-annual report on monetary policy and the economy.

For now, unease about an end to an era of ultra-cheap money gave way to optimism about the global growth outlook, with Friday's stronger-than-expected USA non-farm payrolls report helping to bolster risk appetite.

The Bank of Japan on Monday offered its most optimistic view of the country's regional economies in more than a decade on solid exports and private consumption, underscoring its conviction a steady recovery is gathering momentum. But Germany's DAX climbed 0.1 percent to 12,461. Stocks are off to a mixed start on Wall Street, Tuesday, July 11, 2017, as losses for big department stores and materials companies outweigh gains in health care.

The rapid pace of jobs growth reassured investors that the economy is on a strong enough footing to justify the Fed's plans to raise interest rates once more this year.

"I think the increased hawkishness we have seen from the central banks has led to a fear that we could see a mini-taper tantrum", he said.

Gold has come under renewed pressure in recent days, as investors recalibrated their outlook on USA monetary policy in the light of recent economic data.




"We'll see just how much substance there is to these comments on Wednesday, when the Bank of Canada announces its latest decision, with investors now expecting a 25 basis point increase", said Craig Erlam, senior market analyst at OANDA.

The dollar edged higher against a basket of currencies on Tuesday and touched a four-month high against the yen on the back of a 25 basis-point rise in 10-year USA government bond yields over the past two weeks.

Dealers remain upbeat after Friday's surprisingly strong U.S. jobs data that analysts said has put the Federal Reserve on course for at least one more interest rate hike this year, boosting the dollar.

BONDS: Bond prices were little changed.

US crude oil -0.2% at $44.31/bbl. In early trades, the local unit was trading at US$0.7605, up from US$0.7603 on Monday.

It's a packed week for news that could affect the bond market. The yield on the 10-year Treasury note held steady at 2.38 percent.

Against the dollar, the yen traded at a two-month low of 114.30 in early trades.

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