Asian shares rise on strong Fed tapering; Nikkei rises as yen retreats By Investing.com

Investing.com– Most Asian shares rose in choppy trading on Thursday amid cheers for an excessive interest rate cut by the Federal Reserve, while Japanese markets rose as the yen weakened ahead of a Bank meeting Japan.

Gains in regional markets were somewhat pared after a weak overnight close on Wall Street, as optimism over a 50 basis point interest rate cut by the Federal Reserve was offset by the central bank presenting an outlook higher for neutral rates. The excessive downsizing also raised some concerns about slowing economic growth.

However, US stock index futures rose sharply in Asian trade.

Japanese stocks rise as yen weakens after Fed; The BOJ waited

Japan and indices far outperformed their regional counterparts on Thursday, rising between 2% and 2.8%.

The gains in local markets followed a weaker yen, which fell sharply from near nine-month highs after the Fed meeting. The yen was pressured by a rise in the dollar.

The rise in Japanese stocks also reflected some positioning ahead of the end of a , where analysts are uncertain about another interest rate hike.

But a number of BOJ officials have offered dodgy signals in the weeks leading up to Friday’s meeting, saying the central bank will raise interest rates as inflation rises.

Japanese is scheduled for Friday and will provide more clues.

Asian stocks average reaction to Fed tapering

Asian stock gains were somewhat muted on Thursday, even as the Fed cut interest rates sharply and signaled the start of an easing cycle.

Australia rose 0.3%, pressured by another strong reading in , which gives the Reserve Bank of Australia more room to keep rates high for longer.

Indexes and China rose 0.5 percent and 0.4 percent, respectively, extending a slight rebound from seven-month lows. The Hong Kong index added 0.6%.

The People’s Bank of China is due to decide on the benchmark on Friday, although analysts expect no change given Beijing’s conservative approach to more stimulus.

South Korea fell 0.5 percent in recovering trade after a three-day hiatus, while India index futures pointed to a positive open, with the index eyeing new highs.

The Fed’s Powell quelled some concerns about a weakening economy, saying the risks of higher inflation and a weakening labor market were now balanced.

But the Fed chairman said neutral rates would be much higher than seen earlier and that the central bank had no intention of returning to ultra-low rates as seen during the COVID-19 pandemic.

His comments raised some questions about how far rates will fall in this easing cycle and presented a higher outlook for medium and long-term rates.