Asia: Most stocks higher ahead of Fed decision

Most Asian stocks remained in positive territory for the second consecutive day on Thursday, as investors seemed more convinced the Federal Reserve will not raise interest rates this week.

The US central bank kicked off its two-day meeting on Wednesday and on Thursday will reveal whether it is set to hike interest rates for the first time since 2006 or whether it intends to sit tight for a while longer.

Higher interest rates would increase borrowing costs for US firms, with emerging markets in particular expected to be under pressure.

“The case for raising rates has certainly become less clear cut in recent weeks, particularly with the US manufacturing sector suffering a sharp slowdown on the back of the decline in commodity prices,” said CMC Markets’ chief market analyst Michael Hewson.

“With Chinese growth also faltering and deflationary pressures weighing on commodity prices, as well as prices more generally markets have certainly become more bi-polar as a result of the recent uncertainty.”

The Nikkei Stock Average added 1.43%, while the yen slid 0.24% against the dollar.

Figures released on Thursday showed Japanese exports rose less than expected in August.

According to the Ministry of Finance, exports rose 3.1% year-on-year in August, helped by a weak yen, although they faced headwinds from the recent slowdown in the Chinese economy.

The figure was short of the 4% increase expected by economist polled by Market News International (MNI) but marked the 12th consecutive year-on-year increase.

Imports fell 3.1% from the corresponding period in 2014, more than the 2.2% fall analysts had expected and the eight consecutive year-on-year drop.

Chinese equities, however, surrendered early gains, with the Shanghai Composite Index closing down 2.10%, while Hong Kong’s Hang Seng slid 0.51%.

Elsewhere, South Korea’s Kospi climbed 0.05%, while the won climbed 0.50% against the dollar to remain at its highest level against the greenback since mid-August.

Australia’s S&P ASX 200 rose 0.93%, while the Australian dollar gained further ground against its American counterpart, rising 0.40% against the greenback to remain at its highest level against the dollar since late last month.

Among currencies in emerging markets, the Malaysian ringgit rose 0.71% against the dollar, its strongest level against the greenback in two weeks.