Asia Markets Follow Wall St Rally as Eyes Turn to Fed Meeting

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Asian markets posted healthy gains on Monday following another record finish on Wall Street, as the focus shifts to the Federal Reserve's next policy meeting later in the week.

Investors will be closely watching the US central bank as its policymakers deal with the fallout from hurricanes Harvey and Irma, which hammered the country and are expected to hit economic growth.

While it is tipped to keep borrowing costs on hold, the bank's plans for cutting back crisis-era bond-buying stimulus and any signals about the future of interest rates will be pored over.

However, analysts were unsure about any further increases this year with inflation remaining subdued -- apart from a bigger-than-expected jump in August -- and other indicators still soft.

Despite the trend towards tightening, stock markets remain buoyant and on Friday the Dow and S&P 500 both closed at all-time highs.

In Asia on Monday, Hong Kong was up 1.3 percent in the afternoon and heading towards a 10-year high, Shanghai closed 0.3 percent higher and Sydney rallied 0.5 percent. Singapore added almost one percent, with Seoul jumping 1.4 percent and Taipei up 0.5 percent. 

Manila and Bangkok also ended higher.

Japanese markets were closed for a public holiday.

In early European trade London rose 0.5 percent, Paris gained 0.3 percent and Frankfurt put on 0.6 percent.

"Ultimately draining the economy of cheap money can't be viewed as a positive for markets accustomed to feeding off central bank largesse. Why investors are so complacent is a mystery, but perhaps the reality check will set in midweek," said Stephen Innes, head of Asia-Pacific trading at OANDA.

Greg McKenna, chief market strategist at AxiTrader, added that "traders continue to bet that the (Donald Trump) administration is refocusing on, and heading toward, some of the much-vaunted stimulus and tax cuts which were so much a part of the Trumponomics rally earlier this year".

- Pound kicks on -While the Fed mulls its next move the pound continues to shine against the dollar after the Bank of England last week indicated it would likely tighten monetary policy itself very soon.

After a big increase in inflation, governor Mark Carney said Thursday the chances of a rise had increased. This was followed on Friday by another board member signalling a move in "the coming months".

Central banks are shifting from their easy-money policies as the world economy slowly improves, and the European Central Bank is also set to wind in its own stimulus.

The pound was holding above $1.36 and is sitting around its highest levels since Britain voted to leave the European Union in June last year.

However, the dollar maintained its recent strength against the yen, holding well above 111 yen.

Fears over North Korea receded soon after Friday's second missile test in a month. While the launch over Japan revived geopolitical worries -- especially soon after its provocative nuclear test -- analysts said investors were calm for now.

"With the latest missile test we really didn't see much of a market footprint at all," Todd Elmer, Citigroup's head of G10 forex strategy for Asia ex-Japan, told Bloomberg Television.

"What that signals is that investors are not inclined to extrapolate that provocation into any major flareup in geopolitical tension."

- Key figures around 0720 GMT - Hong Kong - Hang Seng: UP 1.3 percent at 28,154.63

Shanghai - Composite: UP 0.3 percent at 3,362.86 (close)

Tokyo - Nikkei 225: Closed for a public holiday

London - FTSE 100: UP 0.5 percent at 7,251.55

Dollar/yen: UP at 111.35 yen from 110.86 yen at 2100 GMT on Friday 

Euro/dollar: DOWN at $1.1945 from $1.1946

Pound/dollar: UP at $1.3602 from $1.3590

Oil - West Texas Intermediate: UP seven cents at $49.96

Oil - Brent North Sea: UP three cents at $55.65 per barrel 

New York - DOW: UP 0.3 percent at 22,268.34 (close)

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