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Asia-Pacific markets set to rise after largest Fed rate hike since 1994


SINGAPORE — Asia-Pacific markets were set to rise on Thursday, tracking U.S. stocks after the Federal Reserve raised benchmark interest rates 75 basis points in a move that equates to the most aggressive hike since 1994.

In Japan markets, the Nikkei futures contract in Chicago was at 26,700 while its counterpart in Osaka was at 26,530 — higher than the Nikkei 225’s last close at 26,326.16.

In Australia, SPI futures were at 6,622, higher than the S&P/ASX 200‘s last close at 6,601.

Following the rate hike in the U.S., Wall Street was volatile but market indexes rose to session highs after the Federal Open Market Committee took the level of its benchmark funds rate to a range of 1.5%-1.75% — the highest since just before the Covid pandemic began in March 2020.

Fed Chairman Jerome Powell also said during his afternoon press conference that, “either a 50 basis point or a 75 basis point increase seems most likely at our next meeting.”

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The Dow Jones Industrial Average snapped a five-day losing streak, jumping 303.70 points, or 1%, to close at 30,668.53. The S&P 500 rose 1.46% to 3,789.99 while, the Nasdaq Composite gained 2.5% to end the day at 11,099.15.

The Fed said in a statement it was committed to bringing down inflation — currently at a high of 8.6 per cent — to 2%. It also said it would continue to reduce holdings of Treasury securities and agency debt and agency mortgage-backed securities.

Economic data for Asia Pacific today includes Australian unemployment figures and Japan’s trade data.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 105.158. The index has turned downwards after hitting this week’s high on Tuesday at 105.298.

The Japanese yen traded at 134.07 per dollar, strengthening markedly from earlier trade this week. The Australian dollar was at $0.7002, also jumping against the U.S. dollar after weakening to 0.68 earlier this week.



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