Asian stocks advance as investors weigh Yellen comments

Asian stocks rose, extending two- week of gains, as investors weighed comments from central bank leaders for clues to monetary policy and earnings reports.

The MSCI Asia Pacific Index added 0.1 per cent to 148.65 as of 2:15 p.m. in Hong Kong, following two weeks of gains. Slack remains in the US labor market, though interest rates could be raised sooner than expected, Federal Reserve Chair Janet Yellen said in Jackson Hole, Wyoming, last week. European Central Bank President Mario Draghi committed to more stimulus. "The Fed doesn't want to run too fast in trying to tighten things up," Angus Gluskie, managing director at White Funds Management in Sydney, where he helps oversee about $550 million, said by phone. "They still see their employment improving but improving slowly rather than being robust. They recognise they have to normalise rates at some point and they can't leave them hanging out here at these low levels forever, so they are continuing to flag that to markets and that's the status quo".

Hong Kong's Hang Seng Index gained 0.5 per cent and the Hang Seng China Enterprises Index of mainland stocks listed in the city climbed 0.7 per cent. The Shanghai Composite Index was little changed. Futures on the Standard and Poor's 500 Index climbed 0.5 per cent after a technical fault delayed the open of CME Group Inc.'s Globex electronic-trading platform. Japan's Topix index rose 0.4 per cent with Toyota Motor Corp., the world's largest carmaker, providing the biggest boost to the Topix. Toyota rose 0.7 per cent to 5,985 yen. Trading in Japan was 21 per cent below its 30-day average. South Korea's Kospi index gained 0.2 per cent and New Zealand's NZX 50 Index advanced 0.3 per cent. India's SandP BSE Sensex Index rose 0.7 per cent and Singapore's Straits Times Index added 0.5 per cent. Taiwan's Taiex index rose 0.1 per cent while Australia's SandP/ASX 200 Index declined 0.2 per cent.

In her address at the Fed Bank of Kansas City symposium, which hosted central bankers from around the world, Yellen said that there was still a “significant” underuse of the US workforce and the job market has yet to recover from the global financial crisis. She did, however, acknowledge the need for flexibility, saying if progress “continues to be more rapid than anticipated,” a rate rise could come sooner than currently expected and further increases could be more rapid. Draghi, who is striving to avoid deflation and ignite euro- area economic growth, said ECB policy makers “’stand ready to adjust our policy stance further.’’ He said the bank’s governing council will use all available instruments to ‘’ensure price stability over the medium term.’’

Draghi has previously said the ECB may carry out broad asset purchases, or quantitative easing, should the inflation outlook worsen. Bank of Japan Governor Haruhiko Kuroda said at the symposium that his nation's monetary policy was ''having its intended effect'' and that central banks must fight deflation by any and all means. He said Japan should consider using foreign workers to help mitigate labor-force shortages.

China Petroleum and Chemical, known as Sinopec, surged 4.7 per cent to HK$8.07 after posting a better-than-expected 7.5 percent increase in first-half profit, widening the margin it earns from processing crude oil into fuels.

Bloomberg