Asian Stocks Up over Signs of Slower Fed Hikes

By Zhang Mengying

Investing.com – Asia-Pacific stocks were up on Thursday morning as investors saw signs of a possible slowdown in the pace of U.S. interest rate hikes.

Japan’s Nikkei 225 gained 0.22% by 10:47 PM ET (2:47 AM GMT).

South Korea’s KOSPI jumped 0.92%.

In Australia, the ASX 200 rose 0.64%.

Hong Kong’s Hang Seng Index was up 0.30%.

China’s Shanghai Composite was up 0.83% while the Shenzhen Component was up 0.88%.

The U.S. Federal Reserve raised interest rates by 75 basis points to 2.25-2.5% as markets expected. Fed Chair Jerome Powell sounded less hawkish on taming inflation in his news conference, but also provided guidance on the size of the next rate hike and noted that “at some point” it would be appropriate to slow down.

“The Fed no longer feels behind the curve and can now assess the appropriateness of policy ‘meeting by meeting’,” Westpac senior economist Elliot Clarke told Reuters.

“This is not to say that the rate-hike cycle is complete or even that a pause is coming, but risks look as though they are transitioning from being skewed to the upside to the downside.”

Several major U.S. tech companies’ shares, including Meta Platforms (NASDAQ:META), slid after hours as poor quarterly results and outlooks underscored recession fears.

Investors shifted their focus to U.S. gross domestic product for the second quarter, which is due later in the day to see whether a technical recession happens.

“While central banks are still on track to continue tightening this year, it is increasingly likely that the most rapid pace of rate hikes may be behind us,” JPMorgan analysts said in a note.

“Falling commodity prices, notably excluding European natural gas, should offer some inflation relief, and the global economy outside of China is losing momentum.”