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Asian stocks gain after Fed keep US interest rates low

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Copyright 2018 The Associated Press. All rights reserved

Currency trader watch computer monitors near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room in Seoul, South Korea, Thursday, July 30, 2020. Asian stocks advanced Thursday after the U.S. Federal Reserve left interest rates near zero to support a struggling economy. (AP Photo/Lee Jin-man)

TOKYO – Asian stocks advanced Thursday after the U.S. Federal Reserve left interest rates near zero to support a struggling economy.

Benchmarks in Shanghai, Tokyo, Hong Kong and Seoul all gained.

Lower interest rates and investor optimism about a possible coronavirus vaccine have helped global markets recover most of this year’s losses. But analysts say the recovery might be too early to be supported by uncertain economic activity as infection numbers rise in the United States, Brazil and other countries.

On Wednesday, Fed Chairman Jerome Powell warned that rising U.S. cases, which have led some state governments to reimpose anti-disease measures, threaten the modest recovery from the pandemic.

The Fed said it would keep buying $120 billion of Treasury and mortgage bonds every month to encourage borrowing and spending, but Powell said Congress needs to take action. Legislators have yet to agree on aid after $600 in weekly unemployment benefits for millions of Americans run out this week.

“The current situation is all about money in consumer pockets, which is precisely why fiscal policy is so much more important," Stephen Innes of AxiTrader Corp. said in a report.

The Nikkei 225 in Tokyo rose 0.1% to 22,413.40 and the Shanghai Composite Index was off 0.1% at 3,290.87.

The Hang Seng in Hong Kong gained 0.3% to 24,951.85 despite data showing the territory's economy shrank by 9% in the quarter ending in June.