Markets Focus on Brexit Vote, No Fed Hike in the Offing

Asian stocks moved up slightly on Wednesday as the countdown to tomorrow’s Brexit vote made investors jittery. Polls in recent days showing rising momentum for the "Remain" camp helped boost risk appetite in global markets and have put pressure on safe-haven assets such as German bonds and the Japanese yen since Friday. But many investors are holding back from trading as the vote remains too close to call.

Federal Reserve Chair Janet Yellen's cautious tone on future rate hikes added to the restrained mood in most markets. But the Fed decision has been put on the sidelines by most investors who are focusing their attention on the British referendum and the ramifications of its outcome.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent. Japan's Nikkei was down 1 percent while China's CSI 300 index and the Shanghai Composite both advanced about 0.3 percent, and Hong Kong's Hang Seng slipped 0.1 percent.

The S&P 500 Index gained 0.27 percent remaining below an 11-month high touched earlier this month.

Yellen Still Cautious

Fed chief Yellen said on Tuesday the central bank's ability to raise interest rates this year hinges on a rebound in hiring that would convince policymakers the U.S. economy isn't faltering.

According to Tohru Yamamoto, chief fixed income strategist at Daiwa Securities, "A couple of months ago, Yellen was cautiously optimistic. Now she appears cautious while trying to be optimistic. Judging from her comments, a rate hike in July is completely off the table. It is questionable whether the Fed can have enough solid economic data to back up a rate hike even by September."

Cina Coren
Cina Coren is a former Wall Street broker and financial advisor. She holds a Master's degree in Communications and spent many years writing for international news outlets and journalistic publications. Today, Cina spends most of her time writing internet articles and blogs, and reading various newspapers to stay on top of the news.