Asia bourses slip as Fed minutes show hawkish leanings

Thursday 05:25 GMT

Overview

Asian stocks fell, following their US counterparts lower as investors digested the minutes of the Federal Reserve’s January policy meeting.

Hot topic

The Fed’s minutes showed that “many” policymakers thought it would be appropriate to raise short-term US interest rates again “fairly soon”, even given potential uncertainty around the new Trump administration’s economic policies and possible tax cuts.

The market view on rates had already taken a hawkish turn following a recent speech by Fed chair Janet Yellen that prompted speculation rates could be raised as early as March — a prospect that has given the dollar a boost over the past week.

The US dollar index was up 0.1 per cent in Asia, recouping Wednesday’s slight decline and trading close to its highest in almost five weeks.

Forex

Major currencies were weaker against the US dollar, while most Asian currencies were managing to advance. The Japanese yen was 0.2 per cent stronger at ¥113.12 per dollar, while South Korea’s won gained 0.3 per cent as the central bank held interest rates steady as expected.

The big loser was the Australian dollar, down 0.1 per cent to $0.7696 after the release of data showing capital expenditure in the December quarter contracted more than expected. The currency had been down as much as 0.5 per cent at one point.

Equities

Japan’s Topix was down 0.3 per cent. Nissan dropped 0.9 per cent after the carmaker appointed Hiroto Saikawa as chief executive, replacing Carlos Ghosn, who will remain chairman of the board and chief of Renault.

Australia’s S&P/ASX 200 was down 0.3 per cent. Qantas jumped as much as 6.5 per cent as investors looked past a dip in profit to focus on a solid operating performance. Crown Resorts gained as much as 8.8 per cent as the casino operator’s announcement of a share buyback offset concerns about slowing VIP revenue in Macau, a management reshuffle and the scrapping of plans for spinning off most of its Australian property assets.

Hong Kong’s Hang Seng was down 0.2 per cent and China’s Shanghai Composite dropped 0.2 per cent.

On Wednesday, the S&P 500 eased 0.1 per cent from a record high.

Commodities

Oil prices were firming, with Brent crude, the international benchmark, up 0.9 per cent at $56.34 a barrel and West Texas Intermediate up by the same amount, at $54.09.

Gold was fractionally higher at $1,237.87 an ounce.

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