Most markets rise as traders weigh central bank rate plans

BEIJING - Most markets rose in Asia on Thursday, building on the previous day's advances, even after central bank chiefs warned that interest rates would rise further to counter persistent inflation.

The region has enjoyed a broadly positive few days after last week's losses as US data soothed concerns about a possible recession in the world's top economy.

However, worries over the outlook for China continue to weigh on sentiment in Hong Kong and Shanghai after mainland officials failed to provide any details on plans to boost growth, despite pledges of help.

With the weekend crisis in Russia appearing to have ebbed, focus is now back on efforts by the Federal Reserve and other central banks aimed at fighting inflation.

On Wednesday, Fed boss Jerome Powell said officials were leaving the door open to two more hikes, having paused at their July gathering for the first time since kicking off their campaign early last year.

"Policy hasn't been restrictive enough for long enough," he told an annual gathering of central bankers in Sintra, Portugal. "We believe there's more restriction coming."

He added policymakers had not decided whether to go for two successive increases or at alternate meetings and warned rates could stay high for some time as the board tries to cut inflation to their two percent target from the current four percent.

"We will be restrictive as long as we need to be," he said. 

His comments came after European Central Bank chief Christine Lagarde said eurozone borrowing costs would continue to rise.

Even Japan's central bank boss indicated it could move away from its long-running ultra-loose monetary policy, which it has stuck to despite rising prices and a sharp drop in the yen.

The Bank of Japan's Kazuo Ueda said it could begin normalising policy if officials were confident inflation would pick up next year.

He said underlying inflation remained below two percent but the board saw it slowing as the year went on.

"From there on, we are forecasting some increase in the rate of inflation into 2024 -- but, we are less confident about the second part," he added.

"If we become reasonably sure that the second part is going to happen, that could be a good reason for a policy change."

Ueda's remarks gave a little support to the yen, which has dropped in recent months against its major peers as monetary policies diverge.

Traders are keeping tabs on the yen after Japanese officials in recent days said they were following developments closely, indicating they could intervene to provide support if it continues to weaken.