Asia report: Markets mixed as investors await Powell's remarks

Stock markets in Asia ended Wednesday in a mixed state, as investors waited with bated breath for the result of the Fed’s meeting stateside later in the global day.

In Japan, the Nikkei 225 was down 0.02% at 29,914.33, as the yen weakened 0.06% against the dollar to last trade at JPY 109.07.

Fashion firm Fast Retailing was up 0.85%, while among the benchmark’s other major components, automation specialist Fanuc was down 0.68% and technology conglomerate SoftBank Group slid 2.07%.

The broader Topix index gained 0.13% by the end of trading in Tokyo, closing at 1,984.03.

On the mainland, the Shanghai Composite slipped 0.03% to 3,445.55, and the smaller, technology-heavy Shenzhen Composite advanced 0.99% to 2,218.26.

South Korea’s Kospi lost 0.64% to 3,047.50, while the Hang Seng Index in Hong Kong eked out gains of 0.02% to 29,034.12.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 0.6% and SK Hynix 0.36% weaker.

The Federal Open Market Committee’s March meeting in Washington was at the top of the agenda on Wednesday, with concerns that both the dollar and bond yields could surge if the market does not consider chair Jerome Powell’s comments sufficiently dovish.

“Volatility is likely to remain low today as the Fed will be in focus,” said CMC Markets analyst David Madden.

“No change is expected from the US central bank, but the commentary in relation to bond yields and concerns about rising inflation will be the centre of attention.

“The US 10-year yield is back above the 1.63% mark, recent rallies in the yield have put pressure on stocks so if further gains are made from here, equities might endure some pain.”

Madden said Powell was in a difficult spot, as he would not want to hike rates yet, but also could not ignore the rise in yields, and increasing chatter that higher inflation was on the way.

“Powell will probably make it clear that the Fed won’t be pushed around by the bond market and that it will stay the course with respect to its policy as its economic aims are far from being achieved.”

Oil prices were lower at the end of the Asian day, with Brent crude last down 0.97% at $67.73, and West Texas Intermediate falling 0.69% at $64.35.

In Australia, the S&P/ASX 200 was off 0.47% at 6,795.20, as the energy subindex was down 1.19% and the mining sector was off 1.46%.

Among the sunburnt country’s major miners, BHP lost 1.64% and Rio Tinto retreated 0.95% in Sydney trading.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.53% at 12,622.21, led lower by fisheries firm Sanford, which slid 7.6%.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.14% at AUD 1.2929, and the Kiwi retreating 0.06% to NZD 1.3916.