BANGKOK – Shares were mixed in Asia on Thursday, with Tokyo and Sydney logging modest gains after the Federal Reserve cut its benchmark interest rate for a second time this year, citing slowing global economic growth and uncertainty over U.S. trade conflicts.
Japan’s central bank opted to keep its own monetary policy unchanged and its key interest rate at minus 0.1%, as expected.
The decision came amid signs of weaker consumer demand and exports and dimming confidence in the business outlook.
“The bank did highlight increasing downside risks from external demand and stated that it will pay closer attention to the possibility that momentum towards reaching its 2% inflation target will be lost,” Marcel Thieliant of Capital Economics said in a commentary.
The Nikkei 225 index gained 0.3% to 22,031.22 while the Kospi in Seoul climbed 0.4% to 2,078.30. Australia’s S&P ASX 200 added 0.6% to 6,721.00, while the Shanghai Composite index was unchanged at 2,985.66.
Hong Kong’s Hang Seng declined 1.2% to 26,436.41 and shares also fell in Singapore, Taiwan, Thailand and Indonesia.
Brazil’s central bank also cut its benchmark rate, by 0.5%, and more decisions were expected later in the day from Indonesia, the Bank of England and the central banks in Sweden and Norway.
On Wall Street, gains in banks, utilities and technology companies outweighed losses elsewhere in the market, which were broadly lower until the last hour of trading. Bond yields moved lower.
Stocks initially declined after the central bank announced the widely expected rate cut. Its policy statement failed to indicate whether more rate cuts were likely this year, though the central bank left the door open for additional rate cuts if the economy weakens.
“We’re not on a preset course,” Fed Chairman Jerome Powell said in an afternoon press conference.
The S&P 500 index inched 1.03 points higher, or less than 0.1%, to 3,006.73, within 0.7% of its all-time high set in July.
The Dow Jones Industrial Average, added 0.1% to 27,147.08. The Nasdaq slid 0.1%, to 8,177.39, while the Russell 2000 index of smaller company stocks dropped 0.6%, to 1,568.34.
The Fed is trying to combat threats to the U.S. economy, including uncertainties caused by President Donald Trump’s trade war with China, slower global growth and a slump in American manufacturing.
Investors have been expecting the Fed to cut short-term interest rates by another quarter of a percentage point, following a similar cut in late July. The rate, which is now at a range of 1.75% to 2%, influences many consumer and business loans.
A look at how each of the central bank’s policymakers voted offered few clues as to the likelihood of further rate cuts.
The market has been wobbling this week and is so far on track for a slight weekly loss after three consecutive weeks of gains.
Those gains came as both sides in the U.S.-China trade war took steps to ease tensions ahead of planned negotiations in October.
Bond prices rose and the yield on the 10-year Treasury fell to 1.79% from 1.81% late Tuesday. Investors typically shift money into bonds when they grow more concerned about the economy’s health.
ENERGY: Oil prices were steady as Saudi Arabia said it was restoring production at an oil facility attacked over the weekend. Benchmark U.S. crude fell gained 11 cents to $58.22 per barrel in electronic trading on the New York Mercantile Exchange. Overnight, it lost $1.23 to settle at $58.11 per barrel. Brent crude, the international standard, picked up 5 cents to $63.65.
The dollar slipped to 107.83 Japanese yen from 108.42 yen on Wednesday. The euro rose to $1.1035 from $1.1029. /gsg