TOKYO: Asian stock markets mostly rose Thursday, finding a firmer footing after several days of volatile trading linked to anxiety over a probable rate hike in the U.S.
Japan’s Nikkei 225 stock index rose 1.1 percent to 18,928.66. South Korea’s Kospi added 0.3 percent to 1,987.63 following an unexpected rate cut by the central bank. Australia’s S&P/ASX 200 jumped 1 percent to 5,853.70 despite weak jobs data. Hong Kong’s Hang Seng added 0.2 percent to 23,775.44 and the Shanghai Composite Index gained 1.1 percent to 3,327.09.
Investors are watching for clues from a U.S. Federal Reserve meeting next week about the possible timing of an interest rate hike. The Fed was expected to raise interest rates this year but expectations of the timing have been brought forward after strong employment figures suggested the U.S economic recovery is speeding up. The Fed’s key rate has been near zero in the aftermath of the global financial crisis. Low rates have been a boon for stock markets so the prospect of that situation ending is prompting a move out of stocks.
While the Fed is poised to raise rates, the European Central Bank is trying to lower them and the Bank of Japan is also carrying out a mammoth monetary easing effort. The divergent policies are hammering the euro and yen and sending the dollar higher. The euro was trading at $1.0521, its lowest level since April 2003, versus $1.0547 in the previous session. The dollar edged higher to 121.60 yen from 121.47 yen. Asian currencies such as South Korea’s won and Malaysia’s ringgit have also been weakening, which markets may eventually see as a positive since cheaper currencies will boost the region’s exports.