The Asian markets tumbled on Thursday, following a surprise rate cut by the US Federal Reserve. The Bank of Japan kept its policy rate unchanged at 0.25%, despite Governor Kazuo Ueda’s vow to raise rates if the economy meets its forecast.
The Japanese yen dropped 0.74% against the greenback, hitting a one-month low, as investors assessed the BOJ’s move. The Nikkei 225 fell 0.69% to end at 38,813.58, while the Topix index declined 0.22%. In South Korea, the Kospi index dropped 1.95%, and the Kosdaq index fell 1.89%.
Hong Kong’s Hang Seng index declined 0.36%, while mainland China’s CSI 300 index rose 0.12% despite the global sell-off. The Federal Reserve trimmed its overnight borrowing rate by 25 basis points, in line with expectations, but signaled less reductions next year.
Federal Reserve Chairman Jerome Powell addressed the press after the central bank’s decision, saying that the actual cuts would be based on data and not just written-down forecasts. He also emphasized the importance of inflation data in determining future policy decisions.
The Dollar Index is poised to end Wednesday at its highest closing level in more than two years, as investors bet on a stronger US currency. The S&P 500 sectors were all trading lower, with consumer discretionary and real estate leading the decline.
Major investment banks have mixed views on European stocks for 2025, with predictions ranging from modest gains to significant upside potential.
Source: https://www.cnbc.com/2024/12/19/asia-markets.html