By Gina Lee
Investing.com – Asian markets rallied Tuesday morning in Asia after the U.S. Federal Reserve announced unprecedented measures to combat the COVID-19 pandemic.
As COVID-19 continues to force global shutdowns and threaten a global recession, the Fed announced an open-ended asset purchase program on Monday. The Fed pledged to purchase assets under quantitative easing measures without limit. Other measures include maintaining credit flow for business and a first dabble into corporate bonds.
“The coronavirus pandemic is causing tremendous hardship across the United States and around the world. Our nation’s first priority is to care for those afflicted and to limit the further spread of the virus,” the Fed said in a statement.
“… Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate.”
South Korea’s led the gains as it rose 6.93% by 11 PM ET (3 AM GMT). Next door, Japan’s gained 6.66%.
The recouped some of its losses yesterday with a 2.51% gain. The country’s parliament passed an A$80 billion ($46.24 billion) stimulus package yesterday at a special sitting.
Hong Kong’s was up 4.07%. China’s was up 1.88% while Shenzhen Component was up 1.66%.
“Fed policy is shifting into a higher gear to try to help support the economy which looks like it is in freefall at the moment,” Chris Rupkey, Chief Finacial Economist at MUFG Union Bank, told CNBC.
“The central bank is shifting from being not just the lender of last resort, but now it is the buyer of last resort. Don’t ask how much they will buy, this is truly QE infinity.”
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