HONG KONG (AFP) – Asian markets were mixed Tuesday before the US Federal Reserve’s policy meeting, which will be closely scrutinised for clues to its plans on interest rates.
Wall Street provided little direction as investors took a breather after last week’s strong performance across all three main indexes.
Tokyo was down 0.38 per cent, or 58.81 points, at 15,329.91, Sydney shed 0.12 per cent, or 6.35 points, to close at 5,452.6 and Seoul fell 0.33 per cent, or 6.29 points, to close at 1,925.68.
But Hong Kong tacked on 1.63 per cent, or 377.13 points, to 23,520.36. Shanghai climbed 2.07 per cent, or 47.43 points, to 2,337.87 after Monday’s sell-off sparked by news of a delay to plans for a cross-trading platform between the two markets.
The Fed, which starts its two-day meeting later Tuesday, is expected to bring an end to its vast asset-buying programme that has been credited with helping the country avoid recession after the financial crisis.
However, traders are more interested in what bank policymakers will have to say about interest rates, as they try to balance the impact on the global economy of any increase against the need to avoid any bubbles developing at home.
While the Fed has repeatedly said the first rise would come “a considerable time” after the bond-buying stops, dealers want to know how its language will change once it has.
“Nobody really expects the US central bank to derail the wind-down of its own stimulus programme because of global economic growth fears, but the direction and pace of US interest rates is a real concern,” Tatsunori Kawai, chief strategist at kabu.com Securities, told Dow Jones Newswires.
On Wall Street the Dow edged up 0.07 per cent, the S&P 500 dipped 0.15 per cent and the Nasdaq put on 0.05 per cent.
On foreign exchange markets the dollar edged up to 107.84 yen from 107.78 yen in New York Monday afternoon.
And the euro fetched $1.2711 and 137.07 yen against $1.2699 and 136.86 yen in US trade.
The single currency has been given a lift by a better-than-expected result in eurozone bank stress tests. The European Central Bank said at the weekend that more than four in five of lenders assessed had been given a clean bill of health.
However, the unit’s gains were capped after a closely watched survey of German business confidence fell for a sixth straight month, hitting its lowest level since December 2012.