In early Thursday trading, Asian shares displayed a mixed performance, with some indices recording gains while others saw slight declines. Japan’s Nikkei 225 briefly reached a record high but later slipped, closing at 39,794.13, down 0.7%. Australia’s S&P/ASX 200 edged up nearly 0.1% to 7,740.80, while South Korea’s Kospi rose by 0.5% to 2,654.45. Conversely, Hong Kong’s Hang Seng dipped 0.1% to 16,417.39, while the Shanghai Composite increased by 0.5% to 3,053.72.
Market analyst Yeap Jun Rong noted that the positive momentum from Wall Street, coupled with lower Treasury yields and a weaker U.S. dollar, provided some relief. Federal Reserve Chair Jerome Powell reiterated the possibility of interest rate cuts later this year, contingent upon data indicating a cooling inflation trend.
On Wall Street, the S&P 500 advanced by 0.5% to close at 5,104.76, following a 1% decline the previous day. Similarly, the Dow Jones Industrial Average rose by 0.2% to 38,661.05, while the Nasdaq composite increased by 0.6% to 16,031.54.
Investors closely analyzed Powell’s remarks for clues regarding the Federal Reserve’s potential timing for interest rate adjustments, which could alleviate pressure on the financial system and bolster investment prices.
Powell reiterated concerns about the downward pressure on the economy due to high interest rates aimed at controlling inflation. He emphasized the Fed’s cautious approach, indicating that they need greater confidence in inflation’s sustainable movement toward the 2% target before considering rate adjustments, as premature cuts could reignite inflation.
While Powell expressed some confidence in inflation trending towards the target, he stressed the need for additional data to bolster this confidence.
Traders have adjusted expectations, with a rate cut in March now unlikely, shifting their focus to June as a potential starting point for adjustments.
In the bond market, the yield on the 10-year Treasury eased to 4.11% from 4.14% late Tuesday.
Benchmark U.S. crude saw minimal movement, inching down 1 cent to $79.12 a barrel, while Brent crude, the international benchmark, remained unchanged at $82.96 a barrel.
In currency markets, the U.S. dollar dipped slightly against the Japanese yen, slipping to 148.74 yen from 149.32 yen.