The Bank of Japan headquarters, located in Tokyo, was pictured on January 30, 2017. The Bank of Japan is expected to conclude its eight-year negative interest rate policy in April, according to a Reuters poll in which over 80% of economists participated. This marks a significant shift for a central bank that has been considered a global outlier. (Photo Credit: Kazuhiro Nogi | AFP | Getty Images)
The Asia-Pacific markets saw gains in volatile trading on Thursday as investors reacted to the Federal Reserve’s decision to reduce interest rates by half a percentage point. Japan’s Nikkei 225 increased by 2.49%, and the Topix index rose by 2.34%. The Japanese yen weakened by 0.68% against the U.S. dollar, trading at 143.24.
The Federal Reserve decreased its benchmark borrowing rate by half a percentage point, adjusting its target range to 4.75% to 5%. Mirroring the Fed’s action, the Hong Kong Monetary Authority reduced its interest rate by 50 basis points to 5.25%, aligning its policy with the U.S. dollar to which the Hong Kong dollar is pegged.
Hong Kong’s Hang Seng index edged up by 1.20%. Among Hong Kong-listed shares, the property developer China Vanke saw a 7.4% increase.
In mainland China, the CSI 300 climbed by 1.29%, led by a nearly 4% rise in real estate stocks. In South Korea, the blue-chip Kospi dropped by 0.30% after an initial increase, while the smaller Kosdaq gained 0.11%.
Australia’s unemployment rate for August remained steady at 4.2%, as reported by the Australian Bureau of Statistics, consistent with analysts’ expectations polled by Reuters. Employment additions stood at 47,500, surpassing the forecasted 25,000. Australia’s S&P/ASX 200 index advanced by 0.35%.
New Zealand’s GDP for the second quarter contracted by 0.2% compared to the previous quarter, according to official data released Thursday morning. This decline was less than the 0.4% decrease estimated by a Reuters poll.
The Bank of Japan is set to commence a two-day meeting concluding on Friday, during which critical rate decisions will take place. This follows the central bank’s termination of its prolonged ultra-low interest rates regime earlier this year.
Taiwan’s central bank will also be making a key rate decision on Thursday and is expected to release updated economic growth and inflation forecasts for the year. Taiwan’s Weighted Index rose by 1.01%.
In the U.S., all three major indices fell overnight. The Dow Jones Industrial Average decreased by 0.25% to 41,503.1. The S&P 500 declined by 0.29% to close at 5,618.26, and the Nasdaq Composite dropped by 0.31% to 17,573.3. Both the Dow Jones Industrial Average and the S&P 500 hit new intraday highs before reversing to close lower.
CNBC’s Hakyung Kim and Samantha Subin contributed to this report.
