Asia report: Markets mixed as investors digest Yellen speech, Pyongyang news

Asian markets finished mixed on Wednesday, with China-focused bourses going against the others as investors put North Korea on the backburner once again and instead focussed on Fedspeak stateside.

In Japan, the Nikkei 225 was down 0.31% at 20,267.05, as the yen weakened 0.55% against the dollar to last trade at JPY 112.86.

On the mainland, the Shanghai Composite was up 0.06% at 3,345.46, and the smaller, technology-centric Shenzhen Composite finished ahead 0.78% at 1,979.28.

South Korea’s Kospi lost 0.07% to 2,372.57, while the Hang Seng Index in Hong Kong added 0.47% to 27,642.43.

Blue chip tech stocks were ahead in Seoul, with Samsung Electronics rising 0.04% and SK Hynix ahead 0.37%, while manufacturers were largely on the back foot.

Investors spent much of the session digesting a speech from US Federal Reserve chair Janet Yellen overnight, in which she hawkishly said the Fed needed to keep increasing interest rates slowly in an environment of “significant uncertainties”.

Yellen did also concede that the central bank might have “misjudged” how strong inflation and the domestic labour market was.

The likelihood of one more rate hike this year, according to the CME Group’s FedWatch tool, was sitting just under 78% during the Asian session.

Tensions on the Korean peninsula were still bubbling, though they didn’t feature as prominently in investor decisions on Wednesday.

The US Treasury placed sanctions on banks and people linked to Pyongyang on Tuesday in a bid to stem the flow of financial support to the belligerent state.

US President Donald Trump had affirmed his belief that America was “totally prepared” for war with North Korea, although that was apparently not his first option.

Oil prices were slightly higher during Asian trading, with Brent crude last down 0.9% at $57.92 per barrel and West Texas Intermediate losing 0.25% to $51.75.

In Australia, the S&P/ASX 200 was 0.12% softer at 5,664.28, with losses led by the information technology and telecommunication services sectors.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 finished up 0.3% at 7,913.78, as the benchmark neared its ninth consecutive month of growth.

The gains were led by Tourism Holdings, which was up 5.1%, while Synlait Milk added 3.7%.

New Zealand was still without an elected government, as the populist New Zealand First party continued to mull over whether to support the National-Act right bloc or the Labour-Green left after Saturday’s conclusion-free general election.

Winston Peters, leader of NZ First, told a press conference on Tuesday that he was taking a “vow of silence” until 7 October, when the final vote counts are confirmed.

It was a mixed day for the down under dollars, with the Aussie last 0.4% weaker against the greenback at AUD 1.2730 and the Kiwi strengthening 0.03% to NZD 1.3874.