Asia report: Markets move higher as Fed confirms tapering
Central bank's move was widely expected among market participants
Markets in Asia were almost all higher at the close on Thursday, as traders digested the latest central bank decision stateside, after the Fed confirmed plans to begin tapering its asset purchases overnight.
In Japan, the Nikkei 225 was up 0.93% at 29,794.37, as the yen strengthened 0.11% against the dollar to last trade at JPY 113.89.
Fashion firm Fast Retailing was up 0.29%, while among the benchmark’s other major components, robotics specialist Fanuc was down 0.09% and technology giant SoftBank Group dropped 1.36%.
The broader Topix index was ahead 1.18% by the end of trading in Tokyo, settling at 2,055.56.
On the mainland, the Shanghai Composite was 0.81% higher at 3,526.87, and the smaller, technology-centric Shenzhen Composite added 1.32% at 2,425.16.
South Korea’s Kospi was 0.25% firmer at 2,983.22, while the Hang Seng Index in Hong Kong grew by 0.8% to close at 25,225.19.
Seoul’s blue-chip technology stocks were in the green, with Samsung Electronics up 0.28% and SK Hynix rising 0.47%.
The moves higher in Asia came after the US Federal Reserve met market expectations overnight, announcing its plans to reduce its bond buying by $10bn a month, and its mortgage-backed securities by $5bn.
“Asian stocks are mostly in the green, in step with US stocks that rose to new record highs,” said Exinity Group chief market analyst Han Tan.
“The dollar index is not straying far from the psychological 94.0 level, keeping spot gold below its 50-day simple moving average.
“The Fed’s tapering announcement confirmed widely-held expectations, allowing equities to go about their merry way.”
Tan said the reaction across various asset classes, or rather the lack of, was testament to the Fed’s tack in giving enough heads up to investors and traders about the central bank’s policy intentions.
“Fed chair Jerome Powell is still holding fast to the ‘transitory’ version of the inflation narrative and reiterated his stance of being patient with rates.
“Yet markets apparently differ, with Fed funds futures still pricing in a rate hike by mid-2022.”
Oil prices were higher as the region went to bed, with Brent crude last up 1.9% at $83.55 per barrel, and West Texas Intermediate ahead 1.78% at $82.30.
In Australia, the S&P/ASX 200 managed gains of 0.48% to 7,428.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was the region’s odd one out, slipping 0.38% to close at 12,943.94.
Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.31% at AUD 1.3469, and the Kiwi retreating 0.39% to NZD 1.4019.