Stocks in the Asian region was trading mostly higher on Thursday as investors digested the Federal Open Market Committee’s (FOMC) statement which showed that the central bank raised interest rates. The Japanese marketed rallied on the much weaker yen.
Federal Reserve Statement
On Wednesday, the Federal Reserve ended its two-day policy meeting, followed by a press conference by the central bank’s chair Janet Yellen in which she commented on the world’s largest economy proving to be stronger than expected by the Fed.
“Overall, we feel that the forward guidance from the FOMC is consistent with policy normalisation in 2015,” ANZ economists said in a note on Thursday. “Whilst the timing of the first rate rise is data dependent, we continue to expect that the FOMC will begin the normalisation process in March next year.”
Fed policymakers agreed to cut its monthly asset purchases by another $10 billion to $15 billion, as the committee expected to the Quantitative Easing (QE) to end by October.
Asian Stocks
In Japan, the benchmark Nikkei 225 index rallied 1.13% to trade at 16,067.57 points, while Tokyo Topix index advanced 1.15% higher to 1,320.48 points.
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The nation’s trade gap narrowed unexpectedly in August, with an unadjusted trade deficit contacting to 948.5 billion yen in August from 964.0 billion recorded in the previous month, according to a report from the Ministry of Finance on Thursday. The report also showed that imports dropped at a faster pace than exports, with exports falling 1.3% year-on-year in August, while imports declined 1.5%.
The Japanese yen fell to a fresh-six year low against the US dollar, trading around 108.67 yen on Thursday.
The weaker yen boosted some of the nation’s stocks, with Mazda Motor climbed 2.7%, while Honda Motor added 2.1% and Olympus rose 2%. With property stocks, Tokyu Fudosan gained 2% and Mitsubishi Estate was up 2%.
On the downside, Sony fell by more than 11% after the company increased its net loss estimates for this year and said it will suspend an annual dividend.
China
China’s benchmark Shanghai Composite slid 0.03% lower to trade at 2,307.64 points, while Hong Kong’s Hang Seng index declined 0.99% to 24,138.95 points.
The People’s Bank of China (PBOC) will inject 500 billion yuan ($81 billion) each to the nation’s five largest banks for a three-month period, according to economists. Data released by the National Bureau of Statistics today showed that new home prices fell in all but two cities in China tracked by the government.
The South Korean Kospi index edged 0.72% lower to 2,047.74 points, while Australia’s S&P/ASX 200 index added 0.16% to 5,415.80 points, boosting banking stocks higher.
Europe Stocks
Stocks in the European region were in green on Thursday as the market focus on the Scottish referendum on independence from the UK.
The German DAX gained 0.38% to 9,698.88, while the European Euro Stoxx 50 rose 0.26% to trade at 3,245.93. In the UK, the benchmark FTSE 100 was down 0.11% to 6,773.74 and French CAC 40 index added 0.18% to 4,439.36.
Scotland’s Independence Vote
Scotland’s referendum on the country’s independence from the UK began today, as the final YouGov poll showed that 48% Scots are supporting the ‘Yes‘ vote for independence, while 52% opposed. The same result was seen in the final PanelBase poll.
According to Stan Shamu, an analysts from IG, in the event of a ‘Yes’ vote, the currency and equities market is expected to be shaken, while a ‘No’ vote could put investors at ease and could boost the sterling and equities.
In other news, the market are also expecting retail trade figures from the UK and the European Central Bank will be launching its first round of long-term refinancing operations.
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