Signage for the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), will be shown off-exchange in Tokyo, Japan on Friday, October 2, 2020.
Akio Kon | Bloomberg via Getty Images
SINGAPORE – The Asia-Pacific markets were mixed traded Monday ahead of this week’s Federal Reserve meeting in the United States.
Australian stocks were able to reverse previous losses as the benchmark ASX 200 climbed 0.31%. The energy sector gained 1.18%, while the materials sector managed to offset some of its losses, but still fell 0.36%. The heavily weighted financials sub-index rose 0.68%.
The Japanese markets rose, with the Nikkei 225 gaining 0.36%, while the Topix index rose 0.69%.
Tech giant Rakuten jumped 18% after the company said Friday it will issue new shares to raise $ 2.2 billion in capital to compete with its US rivals. Japan Post is expected to take an 8.3% stake in Rakuten, while the Chinese Tencent will take 3.6% and the US retail giant Walmart a 0.9% stake.
In South Korea, the Kospi hesitated between profit and loss – the reference index rose 0.09%. Elsewhere, the Hang Seng index in Hong Kong rose 0.94%.
Mainland Chinese stocks struggled to make a profit: Shanghai’s composite fell 0.21%, while Shenzhen’s component fell 1.51%.
Fed meeting
The Federal Open Market Committee will meet on March 16-17 and some analysts expect the U.S. central bank to revise its GDP forecast, following a $ 1.9 trillion fiscal stimulus package that will send direct payments of up to $ 1,400 to most Americans .
“Some FOMC members may think rates should be higher sooner than they expected in December,” ANZ Research analysts wrote in a morning note.
“For the Fed, the robust recovery and any shift in momentum in the dot plot profile will create communication problems about how long interest rates will remain low,” the analysts said.
Every quarter, the members of the FOMC forecast where short, medium and long-term interest rates will go. These projections are displayed visually in graphs and are called a dot plot.
Fed Chairman Jerome Powell “is likely to link the path of interest rates to a comprehensive economic improvement while emphasizing tolerance for modest inflation overshoot,” ANZ analysts added.
Currencies and oil
In the foreign exchange market, the US dollar was marginally lower at 91.615 versus a basket of its peers, falling from levels above 92.00 last week.
The Japanese yen weakened towards the 109 level and traded at 109.10 against the greenback, from an earlier high around 108.90. Meanwhile, Australian dollars changed hands at $ 0.7750, slipping from a previous level around $ 0.7775.
Oil prices rose during trading hours in Asia on Monday amid growing optimism about the recovery in demand. On the supply side, OPEC and its oil-producing allies said this month that production would remain broadly stable through April.
US crude oil rose 0.9% to $ 66.20 a barrel, while the global benchmark Brent added 0.79% to $ 69.77.