Asia’s major stock indexes headed in different directions on Thursday as the US Fed signalled its long-running tightening campaign was over.
The Fed left interest rates unchanged on Wednesday and US central bank chief Jerome Powell said its historic interest rates push was set to end with inflation falling faster than expected.
But while that sparked a Wall Street rally, which in turn pushed up stocks in Hong Kong, Japan’s yen-sensitive Nikkei share average snapped a three-day winning streak.
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The Nikkei ended 0.73% lower at 32,686.25 after rising as much as 0.6% earlier in the session. The broader Topix fell 1.43% to 2,321.35.
The Japanese yen hit a four-and-half-month high against the dollar, while the US benchmark 10-year bond yield extended declines in Asian hours after hitting its lowest since August overnight.
A stronger yen tends to hurt exporter shares as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.
The auto and autoparts sector lost 3.98%, its biggest daily decline since October 4, to become the worst sector among the Tokyo Stock Exchange’s 33 industry sub-indexes.
Mainland China stocks closed down, erasing their gains from earlier trade, as credit data showed domestic demand remained weak, while Hong Kong shares tracked global markets higher on a dovish tone from the US Federal Reserve.
The blue-chip CSI 300 Index ended 0.52% lower, while the Shanghai Composite Index finished down 0.33%, or 9.77 points, at 2,958.99. The Shenzhen Composite Index on China’s second exchange dropped 0.55%, or 10.16 points, to 1,835.27.
In Hong Kong, tech giants added 0.3%, and mainland developers advanced 1.2%. The Hang Seng Index gained 1.07%, or 173.44 points, to 16,402.19 and the Hang Seng China Enterprises Index advanced 0.41%.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Taipei, Manila, Bangkok, Mumbai and Jakarta all climbed. MSCI’s broadest index of Asia-Pacific shares outside Japan shot up 1.8%, its biggest one-day percentage jump in a month.
ECB, BofE Meetings
It is a busy week for central banks, with the European Central Bank, Bank of England and Swiss National Bank all announcing policy decisions on Thursday. The Bank of Japan’s turn comes on Tuesday.
US stocks surged to a sharply higher close on Wednesday and benchmark Treasury yields slid to their lowest level since August 10.
US stock futures, the S&P 500 e-minis, were up 0.4% on Thursday, while the 10-year Treasury yield pushed down further to as low as 3.9845%, breaking below the psychological 4% mark.
The US dollar index, which measures the greenback against a basket of currencies, fell a further 0.25% to 102.62. The euro gained 0.2% to $1.0899. The yen sat significantly higher, with the dollar sliding 0.7% to 141.82 yen.
Spot gold was up 0.23% at $2,030.99 per ounce, after rising 2.4% on Wednesday.
Oil prices rose, extending gains from the previous session. Brent futures rose 23 cents, or 0.31%, settling at $74.49 a barrel by 0345 GMT. US West Texas Intermediate crude rose 11 cents, or 0.16%, and settled at $69.58 a barrel.
Key figures
Tokyo – Nikkei 225 < DOWN 0.73% at 32,686.25 (close)
Hong Kong – Hang Seng Index > UP 1.07% at 16,402.19 (close)
Shanghai – Composite < DOWN 0.33% at 2,958.99 (close)
London – FTSE 100 > UP 1.97% at 7,697.05 (0933 GMT)
New York – Dow > UP 1.40% at 37,090.24 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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