FX.co ★ Asian Shares Wobble On Fed's Mixed Messages

Asian stocks saw variable performance on Thursday due to different signals from the Federal Reserve's Chief, Jerome Powell, on inflation and interest rates' future prospects. Despite keeping interest rates untouched on Wednesday, future reductions seem promising as the Federal reserve awaits more proof of inflation moderation before cutting rates.

China's central markets remained inactive during the Labour Day holidays. On the other hand, Hong Kong's Hang Seng index bounced back by 2.50 percent to 18,207.13, with traders returning after the holiday.

The Japanese markets demonstrated little change by the day-end, with the yen falling to the lower 155 range against the U.S. dollar after a suspected intervention by Japanese authorities. The Nikkei index marginally ended lower at 38,236.07, marking the second continuous day of losses. Similarly, the broader Topix index came to a standstill at 2,728.53, with a noticeable underperformance in marine transport, steel, and glass sectors.

According to the Bank of Japan's March meeting minutes, many members agreed that markets should primarily set long-term interest rates. Seoul stocks broke their three-day growth streak, with the Kospi average ending down 0.31 percent at 2,683.65 after the Fed ruled out any rate hikes. Investors also considered official data highlighting South Korea's slower-than-expected inflation in April.

In the meantime, Australian markets recognized some gains, spearheaded by banks and miners. The benchmark S&P ASX 200 rose 0.23 percent to 7,587, indicating the Reserve Bank of Australia's monetary policy announcement on May 7.

National Australia Bank experienced a 1.5 percent surge on share buyback news, while Supermarket chain Woolworths saw a 4.2 percent downturn after dismal financial results for the March quarter.

New Zealand's benchmark S&P/NZX 50 index concluded marginally higher at 11,874.04, recovering early losses. In comparison, U.S. stocks swung, eventually closing slightly higher after the Fed decided to maintain the rates, citing minimal progress on cutting interest rates from a two-decade high due to inflation.

Furthermore, the U.S. central bank declared its intention to reduce its balance sheet pace to alleviate money markets' strains. Reports revealed that private payrolls increased at a rate higher than anticipated in April, while factory activity decreased in the month due to falling demand. The Dow rose by 0.2 percent, whereas the tech-heavy Nasdaq Composite and the S&P 500 both fell around 0.3 percent.