Asia – Pacific Stocks Mostly High After U.S. Fed Held Rates.
Stocks in Asia Pacific mostly traded higher Thursday afternoon after the U.S. Federal Reserve left interest rates unchanged.
Mainland Chinese stocks were mixed by the afternoon, with the Shanghai composite up fractionally while the Shenzhen component shed 0.205%. Hong Kong’s Hang Seng index jumped 1.05%.
In Japan, the Nikkei 225 shed 0.13% in afternoon trade while the Topix index dipped 0.45%. South Korea’s Kospi advanced 0.13%.
Over in Australia, the S&P/ASX 200 gained 0.67%. Overall, the MSCI Asia ex-Japan index rose 0.59%.
In a widely expected move, the Fed on Wednesday kept its benchmark overnight lending rate near zero.
“The focus now turns to the September meeting where the expectation is the Fed will provide more forward guidance,” Tapas Strickland, director of economics at National Australia Bank, wrote in a note.
“I think the setting of policy now is probably is about as good as (the Fed) can do given the uncertainty around the path of the epidemic itself,” Dennis Lockhart, former president of the Atlanta Federal Reserve, told CNBC’s “Squawk Box” on Thursday.
“There’s so much uncertainty around the virus, around … the public health question that I think they are in a situation where they really have to wait for a little bit more clarity before they can consider any more policy action,” Lockhart said.
On the economic data front, Japanese retail sales for June declined 1.2% as compared to a year ago, according to a preliminary report by the country’s Ministry of Economy, Trade and Industry. That compared against a median market forecast for a 6.5% year-on-year decline, according to Reuters.
Meanwhile, shares of Singapore banks tumbled by the afternoon: DBS Group dropped 3.33% while Oversea-Chinese Banking Corporation fell 3.82% and United Overseas Bank slipped 2.95% The broader Straits Times index also shed 1.81%.
The moves came after the Monetary Authority of Singapore on Wednesday called on locally-incorporated banks headquartered in Singapore to “moderate” their dividends for fiscal year 2020.
“While the Local Banks’ capital positions are strong, the dividend restrictions are a pre-emptive measure to bolster their resilience and capacity to support lending to businesses and individuals through an uncertain period ahead for our economy,” the Singapore central bank said in a media release.
Currencies & Oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.376 after earlier slipping from levels above 93.6.
The Japanese yen traded at 105.03 per dollar following its strengthening earlier in the trading week from levels above 105.3 against the greenback. The Australian dollar changed hands at $0.7175 after rising from levels below $0.712 this week.