Asian Markets Edge Higher as Investors Watch out on Fed Meeting

Asia-Pacific markets mostly edged higher Tuesday following a relatively subdued start to the global trading week as investors look ahead to the Fed meeting stateside.

Australian shares rose as the benchmark ASX 200 gained 0.8% to 6,827.10, after finishing near flat in the previous session.

Most sectors traded up except for the energy and materials subindexes, which closed down 0.17% and 0.65%, respectively.

The Nikkei 225 in Japan advanced 0.52% to 29,921.09 while the Topix index gained 0.65% to 1,981.50. In South Korea, the Kospi added 0.7% to 3,067.17 while Hong Kong’s Hang Seng index rose 0.6% in late-afternoon trade.

Additionally, the Chinese mainland shares reversed earlier losses to close higher: The Shanghai composite added 0.78% to 3,446.73 and the Shenzhen component advanced 0.91% to 13,642.95.

This comes after a session on Wall Street where the Dow Jones Industrial Average and S&P 500 inched higher to closed at record highs amid optimism over the economic reopening.

The Federal Open Market Committee which is due to meet on March 16 and 17 is keeping investors a little cautious.

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“There is a lot of focus on whether the new forecasts and dots plot will vindicate the current lift in Fed hike expectations,”  said Rodrigo Catril, senior foreign-exchange strategist at the National Australia Bank

A surge in interest rates and a rebounding U.S. economy has put the central bank’s easy policies in the spotlight with market watchers questioning when the Fed will consider unwinding those policies.

Both the Bank of England and Bank of Japan are due to meet on Thursday where they begin their two-day meeting policy

Meanwhile, the Reserve Bank of Australia released the minutes of its March monetary policy meeting, and said that members concluded: “very significant monetary support would be required for some time, as it would be some years before the Bank’s goals for inflation and unemployment were achieved.”

Asian Markets Currencies and oil

In the currency market, the U.S. dollar traded up 0.12% at 91.941 against a basket of peers, climbing from an earlier level around 91.780.

The Japanese yen changed hands at 109.2, staying relatively flat. Meanwhile, the Australian dollar fell 0.36% to $0.7726.

Oil prices slipped on Tuesday during Asian trading hours. U.S. crude futures fell 0.84% to $64.84 a barrel while global benchmark Brent declined 0.78% to $68.34.