HONG KONG, Feb 25, 2010 (AFP) - US Federal Reserve chairman Ben Bernanke's signal that low interest rates would be maintained saw a mixed response in Asian markets Thursday, amid lingering concerns over the pace of US recovery.
Bernanke signaled to lawmakers Wednesday that the central bank is not yet ready to abandon its ultra-low interest rates as it tries to keep a tentative economic recovery on track, leading Wall Street 0.89 percent higher.
However, an unexpected drop in January new home sales in the US to a record low, following weak consumer confidence data earlier in the week, renewed concerns over the health of the world's largest economy.
Hong Kong slipped 0.35 percent in morning trade, while Tokyo shed 0.19 percent as the yen resumed its upswing against the dollar to darken Japanese exporters' earnings prospects, dealers said.
"For those who had sold US stocks last week on the discount rate hike, Bernanke's testimony was a reason for short-covering," said Tachibana Securities' Kenichi Hirano, referring to last week's hike of interest charged on short-term emergency bank loans.
However, for investors paying more attention to fundamentals, "weak US demand-related indicators, such as housing and consumption, are worrying," he told Dow Jones Newswires.
US new house sales plunged 11.2 percent to a seasonally adjusted annual rate of 309,000, from a revised December rate of 348,000, the Commerce Department said, in a fresh sign of weakness in the troubled housing market.
The greenback lost ground against the yen on the weak home sales data and Bernanke's rate remarks.
The dollar fell to 89.83 yen in Tokyo morning trade from 90.12 yen in New York late Wednesday.
The euro dropped to 1.3493 dollars from 1.3534 dollars and to 121.69 yen from 122.03 yen amid heightened risk aversion due to the debt and public deficit crisis afflicting Greece.
Shares of Toyota were up 0.61 percent, after its president Akio Toyoda's Congressional testimony in which he pledged to improve safety after the global recalls of more than eight million vehicles.
Singapore was off 0.16 percent but Shanghai was 0.87 percent higher as bargain hunters continued to pick up bank and real estate stocks following a rebound in the previous session, while Sydney added 0.29 percent.
"It's a very steady market, with volumes remaining on the lighter side," said Burrell Stockbroking director Richard Herring.
Oil was higher. New York's main futures contract, light sweet crude for April delivery, rose eight cents to 80.08 dollars a barrel.
Hong Kong gold opened lower at 1,096.50-1,097.50 US dollars an ounce, down from Wednesday's close of 1,100.00-1,101.00 dollars.
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