ASIA MARKETS: Asian Shares Rise On Fed Stance

Stocks in Japan and Australia led Asia higher for a second day on Friday, as investor confidence continued to be bolstered by expectations the U.S. is in no rush to raise interest rates.

Buying was returning to the region despite a further slide in oil prices overnight. The Nikkei Stock Average was up 1.8%, while Australia’s S&P/ASX 200 gained 2.0%. Stocks were extending gains from yesterday, after the U.S. central bank signaled Wednesday that it would be “patient” in raising interest rates. When it does eventually lift rates, such a move could sap money flows away from riskier markets and into U.S. bonds.

Japan and Australia are outperforming the Asia-Pacific region this week. However, benchmarks in Asian emerging markets–Vietnam and the Philippines in particular–have been battered by a combination of concerns that include declining oil prices, the prospect of eventually tighter monetary policy in the U.S., and a bout of volatility in the region’s currencies. Those worries were on display during an emerging market selloff earlier in the week.

On Thursday, oil was down 4.2%, to settle at $54.11 a barrel, on the New York Mercantile Exchange, its lowest level in more than five years. Prices were last up at $54.62 a barrel. But most countries in Asia are net oil importers so lower oil prices are a welcome sign. In Australia, where big resources firms trade, investor focus on latest indications from the U.S. Fed appeared to overshadow concerns in the commodities market for now.

Elsewhere, the Hang Seng Index was up 1.4% and the Shanghai Composite Index was up 0.5%.

Stocks in the mainland have been largely shielded from the worries abroad, rallying 23% since China’s central bank surprised markets in November with an interest-rate cut, including a week-to-date gain of 4.6%.

The region was tracking the U.S., where the Dow Jones Industrial Average (DJI) vaulted to its biggest two-day gain in more than three years Thursday.