Signage for the Tokyo Stock Exchange (TSE) operated by Japan Exchange Group Inc. (JPX) will be displayed outside the Tokyo Stock Exchange in Tokyo, Japan on Friday, October 2, 2020.
Akio Kon | Bloomberg via Getty Images
SINGAPORE – Asia-Pacific markets traded mixed on the Monday leading up to this week’s Fed meeting.
Australian stocks reversed previous losses as the benchmark ASX 200 index rose 0.31%. The energy sector gained 1.18% while the materials sector made up some of its losses but was still down 0.36%. The heavily weighted sub-index for financial stocks rose by 0.68%.
Japanese markets rose, with the Nikkei 225 gaining 0.36% while the Topix index gaining 0.69%.
Tech giant Rakuten rose 18% after the company announced on Friday that it would issue new shares to raise $ 2.2 billion in capital and compete with its U.S. competitors. Japan Post is expected to take an 8.3% stake in Rakuten, while China’s Tencent will take a 3.6% stake and US retail giant Walmart will take a 0.9% stake.
In South Korea, the Kospi fluctuated between gains and losses – the reference index gained 0.09%. Elsewhere, the Hang Seng index in Hong Kong rose 0.94%.
Mainland Chinese stocks battled for gains: the Shanghai Composite fell 0.21% while the Shenzhen Component fell 1.51%.
Fed meeting
The Federal Open Market Committee will meet on March 16-17. Some analysts believe the Federal Reserve will revise its GDP forecast after a $ 1.9 trillion stimulus package that will send direct payments of up to $ 1,400 to most Americans.
“Some FOMC members may believe that rates must rise sooner than they expected last December,” ANZ Research analysts wrote in a morning note.
“For the Fed, the robust rebound and any shift in momentum in the scatter chart profile will create communication problems about how long rates will stay low,” the analysts said.
The members of the FOMC forecast quarterly where interest rates will go in the short, medium and long term. These projections are graphed visually and are known as a scatter plot.
Fed Chairman Jerome Powell “is likely to combine the interest rate path with broad economic improvement while stressing tolerance for modest inflationary overshoot,” added ANZ analysts.
Currencies and oil
In the forex market, the US dollar was slightly lower at 91.615 against a basket of its peers, falling from a level above 92.00 last week.
The Japanese yen weakened to the 109 level, trading at 109.10 versus the greenback, compared to an earlier high at 108.90. Meanwhile, the Australian dollar changed hands at $ 0.7750, sliding $ 0.7775 from previous levels.
Oil prices rose during Asian trading hours on Monday amid growing optimism about the recovery in demand. On the supply side, OPEC and its oil-producing allies said this month it would keep production broadly stable through April.
US crude rose 0.9% to $ 66.20 a barrel, while the global benchmark Brent climbed 0.79% to $ 69.77.
