World Market News

 Asia stocks dip as the Fed signals low rates for years; Australia’s August jobs data ahead

Stocks in major Asia-Pacific markets mostly traded lower Thursday morning as investors react to overnight developments from the U.S. Federal Reserve.

Japan’s Nikkei 225 slipped 0.14% in early trade while the Topix index hovered above the flatline. South Korea’s Kospi shed 0.18%.

In Australia, the S&P/ASX 200 traded slightly lower.

Overall, the MSCI Asia ex-Japan index shed 0.13%.

On the economic data front, Australia’s employment data for August is expected to be out at around 9:30 a.m. HK/SIN.

The Bank of Japan is also set to release its monetary policy statement at around 12:30 p.m. HK/SIN.

Fed reaction watched

Investor reaction was watched, as members of the U.S. central bank’s policymaking committee indicated the overnight rate could stay close to zero for years to reach its 2% inflation target.

“With regard to interest rates, we now indicate that we expect it will be appropriate to maintain the current zero to 0.25% target range for the federal funds rates until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time,” said Fed Chairman Jerome Powell.

Overnight on Wall Street, the Dow Jones Industrial Average closed 36.78 points higher, or 0.1%, at 28,032.38. The S&P 500, meanwhile, slipped 0.5% to finish its trading day at 3,385.49. The tech-heavy Nasdaq Composite dropped 1.3% to close at 11,050.47.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, sat at 93.179 after earlier rising from levels below 93.0.

The Japanese yen traded at 104.98 per dollar following its strengthening yesterday from levels above 105.2 against the greenback. The Australian dollar changed hands at $0.7291 after seeing levels around $0.733 yesterday.

Oil prices nudged higher in the morning of Asian trading hours, with international benchmark Brent crude futures up slightly at $42.25 per barrel. U.S. crude futures hovered above the flatline at $40.17 per barrel.