Asia report: Markets mixed ahead of Fed interest rate decision

Markets in Asia closed in a mixed state on Wednesday, as investors closed their pocket books ahead of the Federal Reserve’s latest interest rate decision, due later in the global day.

In Japan, the Nikkei 225 slipped 0.08% to 23,391.86, as the yen strengthened 0.06% against the dollar to last trade at JPY 108.66.

Automation specialist Fanuc was down 0.75% and technology conglomerate SoftBank Group slipped 0.14% on the benchmark index, while Uniqlo owner Fast Retailing rose 0.69%.

The broader Topix index was down 0.34% in trading in Tokyo, closing its session at 1,714.95.

On the mainland, the Shanghai Composite was 0.24% firmer at 2,924.42, and the smaller, technology-heavy Shenzhen Composite went the other way, sliding 0.45% to 1,639.50.

South Korea’s Kospi closed 0.36% higher at 2,105.62, while the Hang Seng Index in Hong Kong was ahead 0.79% at 26,645.43.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics up 0.78%, while chipmaker SK Hynix lost 0.12%.

Investor attention through much of the session was on the US Federal Reserve, ahead of its decision on interest rates due later on Wednesday.

Markets are widely expecting the central bank to stand pat on its interest rate target levels.

“It's not often that the central bank plays one of the supporting roles but that is certainly the case this week,” said Oanda analyst Craig Erlam.

“The Fed has cut interest rates at each of the last three meetings and this one comes on the back of a knockout jobs report.

“Policy makers are thinking about Christmas shopping and parties not another rate cut and the odds fully support this.”

At the same time, market watchers were also hungry for developments on the US-China trade front, after a report from the Wall Street Journal on Tuesday suggested Washington was prepared to postpone its planned 15% tariff on Chinese imports, due for implementation on 15 December.

Negotiators from the United States had also reportedly requested China make an upfront commitment to certain agricultural purchases - something which Beijing wanted to be proportional to the amount Washington was prepared to roll back its tariffs.

White House economic advisor Larry Kudlow kept investors on their toes, saying that the planned tariffs for 15 December were still “on the table”.

CMC Markets analyst Michael Hewson said there was still no expectation for an agreement to be reached with Beijing any time soon, though progress in negotiations with Mexico and Canada meant Washington could pass at least one trade deal before the end of the year.

Oil prices were lower at the end of the Asian day, with Brent crude last down 0.61% at $63.95 per barrel, and West Texas Intermediate falling 0.53% to $58.93.

In Australia, the S&P/ASX 200 was up 0.68% by end-of-play, settling at 6,752.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 added 0.1% to close at 11,291.96.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.37% stronger at AUD 1.4629, and the Kiwi weakening 0.01% to NZD 1.5277.