Asian shares were mostly lower and the dollar strengthened Thursday after the Fed said it would start trimming its bond holdings and planned one more interest rate increase this year.
KEEPING SCORE: Japan’s benchmark Nikkei 225 added 0.7 percent to 20,453.68 as the yen weakened against the dollar, benefiting shares of exporters. But other indexes in the region fell, with South Korea’s Kospi slipping 0.2 percent to 2,407.39. Hong Kong’s Hang Seng index slipped 0.1 percent to 28,072.92 and the Shanghai Composite in mainland China dipped 0.1 percent to 3,361.72. Australia’s S&P/ASX 200 fell 0.7 percent to 5,668.90.
FED IN FOCUS: At their latest meeting, Federal Reserve policymakers kept short-term interest rates unchanged but said they still expect one more increase this year and three in 2018, if persistently low inflation rebounds. Since December 2015, the Fed has modestly raised the rate four times. Rates had previously been cut to a record low after the 2008 financial crisis, helping to fuel a multiyear global stock boom. Officials also said they plan to start unwinding the at the U.S. central bank’s $4.5 trillion balance sheet next month by reducing its bond holdings, which will gradually increase long-term borrowing rates. The plans were mostly in line with economist expectations.
INVESTOR INSIGHT: “The Fed’s seemingly hawkish views on sustained lift-off in U.S. interest rates may be seen as a form of pressure for regional equities and could dampen prices today,” said Jingyi Pan, market strategist at IG in Singapore. “Early movers in the region have so far been seen with mixed movements, mostly in red.”
WALL STREET: Major U.S. benchmarks finished mostly higher. The Standard & Poor’s 500 index inched up 0.1 percent to 2,508.24 and the Dow Jones industrial average rose 0.2 percent to 22,412.59. The Nasdaq composite lost 0.1 percent to 6,456.04.
CURRENCIES: The dollar rallied against its peers after the Fed statement, rising to a nearly two-month high of 112.53 yen from 112.23 yen on Wednesday. The euro weakened to $1.1873 from $1.1892.
ENERGY: Oil futures snapped their rally. Benchmark U.S. crude dipped 3 cents to $50.66 a barrel added in electronic trading on the New York Mercantile Exchange. The contract rose 93 cents, or 1.9 percent, to settle at $50.41 a barrel on Wednesday. Brent crude, used to price international oils, gained 14 cents to $56.15 a barrel in London.