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BANGKOK (AP) — Asian shares advanced Wednesday after a Wall Street rally led by the banks most beaten down by the industry’s crisis.
Oil prices fell back and U.S. futures were little changed.
Investors are awaiting an interest rate decision by the Federal Reserve, which is expected to temper its efforts to tame inflation given the recent turmoil that has wracked the banking sector. Some of Wall Street’s fear washed out after U.S. Treasury Secretary Janet Yellen said the government could offer the banking industry more assistance if needed.
Markets around the world have pinballed sharply this month on worries the banking system may be cracking under the pressure of the fastest set of hikes to interest rates in decades. This week’s rally now runs into a huge test with the Fed decision.
In Asian trading, Tokyo's Nikkei 225 surged 2.1% to 27,501.24, catching up on gains after the market was closed on Tuesday for a holiday. Hong Kong's Hang Seng index advanced 1.9% to 19,629.21 and the Shanghai Composite index added 0.3% to 3,263.85.
Australia's S&P/ASX 200 jumped 0.9% to 7,016.40. The Kospi in South Korea climbed 1% to 2,412.94.
Tuesday on Wall Street, the S&P 500 rose 1.3% to lock in its first back-to-back gain since Silicon Valley Bank’s rapid failure began two weeks ago. It closed at 4,002.87.
The Dow Jones Industrial Average rose 1% to 32,560.60, while the Nasdaq composite jumped 1.6% to 11,860.11.
“Janet Yellen coming out and saying should other deposits need to be protected, they’re willing and able to do that, I think that’s a very strong statement,” said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth. “And so markets have been able to calm down.”
Yellen told a bankers’ group more government assistance “could be warranted” if risks arise that could bring down the system. That could mean making sure customers at a weakened bank get all their money, even those with more than the $250,000 limit insured by the Federal Deposit Insurance Corp.
Other smaller and mid-sized banks also rallied, including a 9.1% climb for Comerica and a 9.3% jump for KeyCorp.
Earlier this month, much of Wall Street was bracing for the Fed to reaccelerate its hikes and raise by 0.50 percentage points on Wednesday after reports on the job market, retail sales and inflation came in hotter than expected. Now, traders are beginning to bet that the Fed might even cut interest rates later this year.
In other trading Wednesday, U.S. benchmark crude oil lost 35 cents to $69.32 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.85 to $69.67 on Tuesday.
Brent crude, the pricing basis for international oils, declined 34 cents to $74.98 per barrel.
The dollar rose to 132.48 Japanese yen from 132.47 yen. The euro was nearly unchanged at $1.0770.
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AP Business Writers Stan Choe and Alex Veiga contributed.
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