Asia: Equity markets end week on mixed note after Fed's decision

Asian stock markets closed on a mixed note on Friday, after the Federal Reserve decision to keep interest rates unchanged sparked a bout of volatility.

On Thursday night, the US central bank opted to leave interest rates unchanged, although it did not rule out the chance of tightening its fiscal policy later this year.

“The combination of the Fed not hiking rates, lowering its economic forecasts and “dots” and expressing concerns about international conditions is consistent with the Fed’s very dovish policy leanings,” said Mickey Levy, chief US, Americas and Asia economist at Berenberg.

“It reveals the Fed’s risk-aversion in the conduct of monetary policy and its assessment that the risks of maintaining its extremely accommodative monetary policy are low compared to the potential costs of upsetting financial markets with a rate hike.”

The Shanghai Composite Index reversed earlier losses to close up 0.38% but lost 3.2% this week, while Hong Kong’s Hang Seng rose 030% and closed the week up 1.9%.

Meanwhile, according to International Energy Forum 's Secretary General Aldo Flores-Quiroga, China’s economic transition from a manufacturing economy to a modern services sector-focused nation will invariably lead to lower gross domestic product growth.

“While it is not preordained that a transition results in lower economic performance, we see China’s growth dipping to around 5% per annum over the medium term and that is still a decent rate which many countries would wish for,” he said.

Japan’s Nikkei Stock Average fell 1.96%, bringing its weekly losses to 1.1%.

Analysts attributed the decline in Japanese equities to the strengthening yen, which rose over 0.3% against both the pound and the euro and climbed 0.7% against the dollar.

Elsewhere, Australia’s S&P/ASX200 gained 0.46%, while South Korea’s Kospi rose 0.98%.

On the currency front, the Australian dollar rose over 1% against its American counterpart, but the Indonesian rupiah and South Korean won both fell slightly against the greenback, losing 0.29% and 0.43% respectively.

The Malaysian ringgit, meanwhile, traded close to its strongest level against the dollar in more than two weeks.