Asia report: Markets mixed as investors digest Fed decision

Markets in Asia were in a mixed state as they closed another quiet session Thursday, as investors spent much of the session digesting the Federal Reserve’s policy decision overnight.

Bourses in both Japan and mainland China remained closed for holidays in those two countries.

The yen was last 0.09% weaker against the dollar, trading at JPY 111.48.

South Korea’s Kospi was up 0.42% at 2,212.75, while the Hang Seng Index in Hong Kong was 0.83% higher at 29,944.18.

Both of the blue-chip technology stocks were in the green in Seoul, with Samsung Electronics was 0.11% firmer and chipmaker SK Hynix up 2.15%.

Insurance firm AIA was among the leading risers in Hong Kong, finishing its session on the front foot by 4.13%.

Traders were kept busy for much of the session after the Federal Reserve elected to stand pat on interest rate targets in the US overnight.

Chair of the central bank, Jerome Powell, suggested to media that the recent lack of inflationary pressure could be a temporary phenomenon, describing it as “transitory”.

That led to concern that the previously-broad expectations of future interest rate cuts could fail to materialise.

It came after fresh data earlier in the week showed America’s core personal consumption expenditure inflation was 1.6% year-on-year in March, the same as it was the month before and well short of the 2% targeted by the Fed.

True to form, US president Donald Trump had waded into the interest rate argument this week, urging it to cut interest rates by a whole percentage point due to the low inflation.

Analysts were also keen to suggest that stocks in the region were lifted on Thursday by reports that a US - China trade agreement could be announced as soon as next Friday.

“This comes as officials from both sides wrapped up the latest round of trade talks,” said London Capital Group head of research Jasper Lawler.

“Chinese vice-premier Liu He will travel to Washington for more talks next week.”

Oil prices were lower as the region went to bed, with Brent crude last down 1.29% at $71.26 per barrel, and West Texas Intermediate falling 1.48% to $62.67.

In Australia, the S&P/ASX 200 lost 0.59% to 6,338.40, while across the Tasman Sea, New Zealand’s S&P/NZX 50 surged 1.2% to break through the 10,000 point psychological milestone once again, closing at 10,084.99.

It was underpinned by a 2.6% rise for the country’s biggest fuel company, Z Energy, which flagged a dividend rise of at least 12% as a result of cost-cutting since it bought Chevron’s local retail operation Caltex.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.14% at AUD 1.4238, and the Kiwi advancing 0.11% to NZD 1.5082.