Asia report: Markets finish mixed ahead of Fed rate decision

Markets finished in a mixed state in Asia on Wednesday, as investors turned their attention across the Pacific to the US Federal Reserve’s interest rate decision for the month, set to be released later in the global day.

In Japan, the Nikkei 225 was down 0.18% at 21,960.71, as the yen weakened 0.06% against the dollar to last trade at JPY 108.20.

Of the major components on the benchmark index, automation specialist Fanuc was up 1.41% and fashion firm Fast Retailing added 0.65%, while technology conglomerate SoftBank Group fell 1.94%.

The broader Topix index was off 0.49% by the end of play in Tokyo, ending its trading session at 1,606.62.

Fresh data out of Japan on Wednesday showed an 8.2% fall in the country’s exports year-on-year for August.

That was still better than the 10.9% drop predicted by economists polled by Reuters.

On the mainland, the Shanghai Composite was 0.25% firmer at 2,985.66, and the smaller, technology-heavy Shenzhen Composite rose 0.26% to 1,655.61.

South Korea’s Kospi was 0.41% higher at 2,070.73, while the Hang Seng Index in Hong Kong slipped 0.13% to 26,754.12.

Brewing giant Anheuser-Busch InBev kicked off the process to spin out its Asian operations for a second time during the session, taking orders on in planned initial public offering in a bid to raise up to $6.6bn on the Hong Kong market.

The Budweiser maker said it would price the offering on 23 September, with the stock making its debut on 30 September, having announced on Tuesday that it would offer 1.3 billion shares at between HKD 27 and HKD 30 each.

Both of the blue-chip technology stocks were in the green in Seoul, with Samsung Electronics ahead 1.71% and chipmaker SK Hynix rising 1.01%.

Market watchers were collectively holding their breath on Wednesday, ahead of the Federal Reserve’s interest rate decision later in the day.

The US central bank is widely expected to take 25 basis points off ints interest rate targets, which would make for its second rate cut in the calendar year.

“Investors want to hear more about the Fed’s plans to increase the short-term liquidity amid this week’s repo crisis sent the overnight repo rate up to 10%, pushing the federal funds effective rate from 2.14% to the Fed’s upper bound of 2.25%,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

He said that was raising worries that the Fed could be losing control over the short-term borrowing rates, something he described as “an unwished scenario which has sent Lehman Brothers bankrupt back in 2008 and triggered a worldwide financial crisis.”

Oil prices slipped as the region went to bed, with Brent crude last down 0.39% at $64.32 per barrel, and West Texas Intermediate falling 0.66% to $58.95.

In Australia, the S&P/ASX 200 lost 0.2% to close its trading day at 6,681.60.

Sydney-listed shares of New Zealand outdoor clothing and equipment brand Kathmandu were a standout performer, however, leaping 7.6% after the company reported a rise in net profit after tax of more than 13%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.9% at 10,774.95, led lower by specialist dairy exporter A2 Milk, which fell 3.9%, while its strategic partner Synlait Milk was 2.1% lower.

Kathmandu fared well in its home market as well, however, with its shares rising 6.8% to close at their highest price since last October in Wellington trading.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.47% at AUD 1.4632, and the Kiwi retreating 0.41% to NZD 1.5790.