Asia stocks bounce, dollar dips on Fed hike doubts

"For this week, the focus is on one thing and one thing only, which is the USA non-farm payrolls", Think Markets chief market analyst Naeem Aslam said.

While stocks have slipped in recent weeks to erase August gains on rising speculation interest rates could climb as soon as next month, data supporting a hike have been inconsistent.

"The market is focusing on (Mr. Fischer's) comments", in an interview with Bloomberg TV later today, especially after his hawkish remarks last week, said Yuzo Sakai, manager of FX business promoting at Tokyo Forex & Ueda Harlow. Again this makes sense as higher rates would tend to favor their expectations for their earnings.

All eyes and ears are on the US Federal Reserve - will the world's most influential central bank raise its interest rate twice this year? The Australian dollar, which marked its first back-to back weekly slide since May last week, slipped 0.2 percent to 75.48 United States cents.

With the cheaper yen improving the export competitiveness of Japan's big exports like auto companies, Tokyo stocks reacted positively, the Nikkei average jumping 2.3%.

The commodities-related European oil and gas and basic resources sectors were the only ones in negative territory, down 0.2 percent and 2.1 percent respectively.

The US dollar index, which tracks the greenback against a basket of six rivals, was steady yesterday at 95.551, not far from Friday's high of 95.594, its highest level since August 16.

Expect the gains to remain capped on doubts that global crude producers will come to an agreement next month to an output freeze. As of Monday morning, West Texas Intermediate crude is trading at $46.93.

"Precious metals prices still remain under pressure from the incumbent rate hike but a weaker U.S. dollar is giving them a new sign of life for the time being", said Miguel Perez-Santalla, vice president of Heraeus Metal Management in NY.

U.S. gold futures were flat at $1,327.30.

"While the move towards another Fed rate hike will likely cause bouts of consternation in investment markets I don't see the same degree of uncertainty that we saw around last year's Fed rate hike", Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note.

However, in the 12 months through July, the core personal consumption expenditure, the Fed's preferred inflation measure, increased 1.6 percent, below its 2 percent target. US 30-year Treasury bond yields also fell, with their prices rising more than a full point.

Fed Chair Janet Yellen said at a central bank retreat in Jackson Hole, Wyoming, that the case for tightening USA monetary policy had strengthened, a message later reinforced by Vice Chairman Stanley Fischer, who said a rate increase in September is possible.

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