Powell's "dovish" tone ignites bullish sentiment, analysts exclaim Asian stocks and currencies set to rise.

This week, Asian stock markets are expected to start strong, and Asian currencies may also receive support as a result. Wall Street analysts also pointed out that Asian stock markets and currencies are expected to further strengthen. Earlier, Federal Reserve Chairman Powell's speech at the Jackson Hole symposium indicated that the Fed is likely to cut interest rates at its next policy meeting in September. Last Friday, the US stock market rose sharply, with the Dow Jones Industrial Average reaching a new high for the year. At the same time, emerging market currencies ended a six-day decline as Powell's remarks led to a significant depreciation of the US dollar. Here are the views of analysts and strategists: Gerald Gan, Deputy Chief Investment Officer of Singapore's Reed Capital, said, "If the market's expectations for a rate cut continue to intensify before the September FOMC meeting, the overall Asian stock market will definitely be boosted. As long as the appreciation of the yen is controlled, its impact on Japanese risk assets will not be too severe. Since the Bank of Japan is closely monitoring the yen's movement, I expect the future fluctuation of the yen to be not too significant, which once again means that the Japanese stock market may continue to rise next year." Priyanka Kishore, Chief Economist of Asia Decoded, pointed out, "A weaker US dollar may temporarily boost Asian currencies, as Powell indicated a possible rate cut in September. However, unless the Fed commits to a more aggressive easing policy, any uptrend may only be temporary." Hebe Chen, Analyst at Vantage Markets, said, "Powell's signal of 'wishful thinking turning into reality' will help fill the cracks beneath the surface of slight volatility in Asian markets. Although this signal does not guarantee its permanence, this boost will be most evident in sectors and markets dominated by technology stocks (such as Japan and Taiwan), as market sentiment is more fragile in these areas. For investors, this new optimism is likely to keep risk appetite high until September 17." Jamie Halse, CEO of Senjin Capital, believes, "In the short term, this may be beneficial for global markets, as it means funds will move out of the US to seek higher returns in other regions, and the US dollar will depreciate as a result. If interest rates remain unchanged in other regions, lower rates usually reduce the attractiveness of dollar investments. That's why when US rates fall, the dollar usually falls too. Lower US rates, combined with strong stances from Powell and Kuroda, mean that the yen will strengthen against the dollar. This will hurt the earnings of large exporting companies and those with significant profit reserves overseas, but will benefit smaller companies with dollar-denominated purchasing and domestic market-focused businesses." Anna Wu, Cross-Asset Strategist at VanEck Associates, said, "Powell's speech took a moderate stance, removing obstacles to a rate cut in September and boosting market risk sentiment. This is beneficial for stocks and short-term bond markets. In my opinion, the Japanese stock market will rise due to improved market sentiment. However, Nvidia's performance and PCE data this week will be crucial to test whether this uptrend can be sustained. The yen may appreciate slightly against the dollar, as the Jackson Hole symposium pushed up yields." Tim Waterer, Chief Market Analyst at KCM Trade, said, "Powell's remarks at the Jackson Hole symposium appeared more moderate than hawkish, which is seen as a godsend for risk assets markets. The prospect of lower US rates may prompt investors to seek returns elsewhere, which could be positive news for Asian economies." Marito Ueda, Head of Research at SBI Liquidity Market, wrote, "Powell's speech seemed to imply a rate cut in September, but he was not so firmly supportive of a rate cut, only indicating it would depend on data. The rise in the USD/JPY exchange rate was due to market expectations of a strong statement, so the exchange rate subsequently fell by the same amount. I believe the USD/JPY exchange rate will not break out of its trading range." Kazuya Fujiwara, Fixed Income Strategist at Mitsubishi UFJ Morgan Stanley Securities, pointed out, "Japanese government bond prices may remain stable due to lower US rates, but the upside is limited as the market anticipates the Bank of Japan hiking rates, coupled with concerns about fiscal expansion. Kuroda's statement in the working group discussion that 'there will continue to be pressure for wage increases' is likely to be read as a signal that the Bank of Japan will continue to raise rates." Yusuke Matsuo, Senior Market Economist at Mizuho Securities, said, "The Bank of Japan is considering raising rates, while the Fed is considering cutting rates, so these two central banks are likely to go in opposite directions in terms of policy rates. The foreign exchange market is expected to gradually move towards yen appreciation and dollar depreciation, reflecting market expectations that the Bank of Japan will raise rates again this year, while the Fed will cut rates twice." Steven Englander, Head of Global G10 FX Research at Standard Chartered Bank, added, "Powell would not have made such remarks unless he was certain that the FOMC is highly likely to lower rates. It would be meaningless to raise market expectations and then disappoint them. The key question for the market is how much job growth is needed to prevent a rate cut, as well as how much job growth is needed to justify a 50 basis point rate cut."