TOKYO, July 17 (Reuters) - Asian stocks were mostly lower on Tuesday, with a sharp decline in crude oil prices weighing on energy shares, while the dollar dipped ahead of Federal Reserve Chairman Jerome Powell's first US congressional testimony.
The dollar rose across the board on Wednesday, climbing to a six-month high against the yen, after US Federal Reserve Chairman Jerome Powell gave an upbeat outlook for the economy and reinforced views that the Fed was on track to steadily hike interest rates.
In addition the recent tax cut is fueling consumer spending, and business investment remains strong, he said in his semi-annual testimony to the Senate Finance Committee.
Powell also touched on the matter of trade disputes between the US and its trading partners, saying it was "difficult to predict" the implications of those on the economy.
Powell's comments come as an increasing number of economists and policy makers warn that trade tensions threaten to undermine global growth.
Powell said that the Fed should continue to hike rate gradually, prompting the late dollar buying in an illiquid market. "Overall, we see the risk of the economy unexpectedly weakening as roughly balanced with the possibility of the economy growing faster than we now anticipate", Powell said.More news: Trump and Putin 'discussed Ukraine' crisis at Helsinki summit - Russian leader reveals
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In Novermber 2017, Powell acknowledged that "in the long, long run, cryptocurrencies and things of that nature could matter", adding that blockchain could be something that "may have significant applications in the wholesale payments part of the economy".
The pan-European FTSEurofirst 300 index rose 0.26 percent, helped by Powell's testimony, amid a batch of mixed company updates.
Bond prices spent the day bouncing back and forth across the unchanged line.
- Wage growth at last? "That is usually a recipe for a stronger dollar", said David Meger, director of metals trading at High Ridge Futures in Chicago.
After the 2008 financial crisis, the Fed kept its key policy rate at a record low near zero for seven years before starting a slow process of boosting rates in December 2015.
He noted that the number of people in the workforce had remained stable, which is "a sign of labor market strength", given the retirement of the baby boom generation which is taking workers out of the labor force.
Challenged by several senators on the sluggish wage growth, Powell agreed "not everybody is experiencing the recovery". He said that we live in a time of extraordinary technological change. "Congress has the tools", he said.