Asian shares, for the most part, advanced on Thursday after the US Fed quashed fears of more interest rate hikes, with tech stocks across the region leading the way.
But while the Federal Reserve downplayed risks of a rate rise, the yen was bumpy after another burst of suspected intervention from Japan.
Shortly after Fed Chair Jerome Powell had finished telling reporters the Fed may have to leave rates elevated for while yet, the yen surged against the dollar.
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That saw Japan’s Nikkei share average finish lower for a second consecutive day, with a mixed performance on Wall Street also dragging on sentiment.
The Nikkei seesawed in and out of positive territory throughout the session but ended down 0.10%, or 37.98 points, to close at 38,236.07.
Losses were relatively limited, however, as investors avoided making big moves before the market entered a long holiday weekend. The broader Topix declined 0.03% to 2,728.53.
The Japanese currency’s sharp rebound weighed on export-related shares such as Toyota Motor, down 0.7%, and Honda Motor, falling 0.3%, which tend to benefit from a weaker yen.
Hong Kong stocks jumped, after those less hawkish than expected comments from the Federal Reserve, while Beijing vowing to step up economic support also buoyed sentiment.
The Hang Seng Index gained 2.50%, or 444.10 points, to close at 18,207.13, led by gains in technology, property and financial stocks. Chinese markets are closed for holidays until Monday.
Indexes tracking Hong Kong-listed Chinese tech giants and Chinese property developers surged 4% each.
Elsewhere across the region, South Korea’s Kospi edged 0.31% lower, after official data showed the country’s consumer prices in April reached 2.9% year on year, a slower pace compared to the data in March.
Australia’s S&P/ASX 200 advanced 0.5% to 7,603.80 and Indian stocks were ahead with Mumbai’s signature Nifty 50 index up 0.26%, or 57.95 points, at 22,662.80. MSCI’s Asia ex-Japan stock index was firmer by 0.65%.
Yen Intervention Suspected
European futures were mixed, with Eurostoxx 50 futures down 0.2% while FTSE futures added 0.4%. S&P 500 futures rose 0.5%, pointing to the cash market recouping a late slide on Wall Street.
Oil was nursing a heavy fall on demand worries and a surprise jump in US stockpiles. Brent crude futures were up 54 cents a barrel to $83.98, after touching a seven-week low of $83.29 on Thursday. US crude was at $79.52 a barrel.
Treasuries rallied, pushing yields lower, as the Fed also said it would slow its balance-sheet run-off. However in Asia some of that move was unwound. Ten-year Treasury yields rose 2.3 basis points to 4.614% in Tokyo, having fallen 9.3 basis points in New York on Thursday.
Two-year year yields, which fell more than 10 bps in New York overnight, rose 1 bp to 4.9497%.
In foreign exchange trade all eyes were on the yen, which after a leap in late New York trade spent much of the Asia session giving up a majority those gains. The yen has been on a downtrend for years as global interest rates have gone up sharply while Japan’s stayed ultra-low.
The dollar was last up about 0.8% to 155.80 yen, the euro was up 0.9% at 167.00 yen and the Aussie was trading near 102 yen. Tokyo money market data indicated Japanese authorities may have spent nearly $35 billion buying the yen on Monday, not long after it had touched 160 per dollar, lows last visited over three decades ago.
On the earnings front chipmaker Qualcomm beat market expectations for sales and profit, sending its shares up 4% in after-hours trading.
Focus later on Thursday will be on Apple results, where markets have braced for a big drop in sales and are waiting to hear of the company’s plans for AI in iPhones.
Outside of oil, trade in other commodities was subdued by holidays in China, where markets are closed for the rest of the week. Gold rose overnight and was last holding at $2,314.44 in Asia trade.
Key figures
Tokyo – Nikkei 225 < DOWN 0.10% at 38,236.07 (close)
Hong Kong – Hang Seng Index > UP 2.50% at 18,207.13 (close)
Shanghai – Composite <> CLOSED
London – FTSE 100 > UP 0.44% at 8,156.67 (0853 BST)
New York – Dow > UP 0.23% at 37,903.29 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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