Asia report: Most markets rise on back of Fed minutes

Most stock markets in Asia finished in the green on Thursday, as investors digested signals from the US Federal Reserve that it could soon be slowing its pace of tightening.

In Japan, the Nikkei 225 was up 0.95% at 28,383.09, as the yen strengthened 0.91% on the dollar to last trade at JPY 138.33.

Robotics specialist Fanuc was up 0.68%, while Uniqlo owner Fast Retailing was down 1.06% and tech investing giant SoftBank Group was 0.07% weaker.

The broader Topix index was 1.21% firmer by the end of trading in Tokyo, ending the session at 2,018.80.

On the mainland, the Shanghai Composite was down 0.25% at 3,089.31, and the technology-centric Shenzhen Component was 0.15% weaker at 10,956.68.

South Korea’s Kospi was 0.96% higher at 2,441.33, while the Hang Seng Index in Hong Kong was ahead 0.78% at 17,660.09.

The Bank of Korea sated market expectations with a 25-basis point rate hike to 3.25%, making for a smaller rise than previously.

Seoul’s blue-chip technology stocks were in the green, with Samsung Electronics up 0.66%, and SK Hynix jumping 2%.

Minutes from the last Federal Open Market Committee meeting, released overnight, showed most members saw the pace of rate hikes as slowing soon.

“This is not a significant surprise, if indeed it’s surprising at all,” said Markets.com chief market analyst Neil Wilson.

“Mostly we knew that the Fed was wanting to take its foot off the gas a bit as we round the corner of the year into 2023 to allow time to take a look in the rear view mirror to see if the economy was catching up with the breakneck pace of hikes.”

The Hong Kong dollar was also in focus, after a short fund giant announced a position on the special administrative region’s currency.

“US rate hikes are the source of a lot of pain this year and Hong Kong’s dollar is increasingly finding itself in the firing line,” Neil Wilson said.

“Hedge fund billionaire Bill Ackman says he has taken a short position against the HKD, arguing that it’s only a matter of time before it breaks.”

Wilson noted that the Hong Kong Monetary Authority had a mandate to keep the currency trading in a range of HKD 7.75 to HKD 7.85 to the US dollar, which it had successfully done thus far.

“Ackman is not the first to bet against the peg - George Soros and arch China hawk Kyle Bass have done so in the past and lost.

“But the pace of Fed rate hikes may make it increasingly difficult for the HKMA to maintain the peg.”

Oil prices were weaker as the region went to bed, with Brent crude futures last down 0.57% on ICE at $84.92 per barrel, and West Texas Intermediate slipping 0.22% to $77.77 on NYMEX.

In Australia, the S&P/ASX 200 added 0.14% to 7,241.80, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was unchanged at 11,321.71.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.28% at AUD 1.4811, and the Kiwi advancing 0.31% to NZD 1.5968.

Reporting by Josh White for Sharecast.com.