Asia Pacific markets were mixed as investor sentiment remains fragile

In our view, the risks surrounding a recession in 2023 cannot be ignored.

Keri Craig

Global market strategist, JPMorgan Asset Management

Japan Nikkei 225 Today Topix rose 0.4% to 26,431.20 while Topix rose 0.64% to 1867.81.

shares express retail It rose 1.44% while the bot maker rose Fanuc Its stock saw a gain of 0.47%. Trade data released in the morning showed Japan running a trade deficit after a weaker yen boosted imports.

in Australia , S & P / ASX 200 It closed down 0.15% at 6591.10.

Australian unemployment figures held steady at 3.9% in another indication that the Reserve Bank of Australia, like the Federal Reserve and many other central banks, will stay on course to raise interest rates again. Ben Ode of Capital Economics said the unemployment rate is now 3.9% for three straight months but could drop to 3.5% at the end of the year.

More in South Korea, Cosby The index rose 0.16%, ending the trading day at 2451.41.

MSCI’s broadest index of Asia Pacific shares outside Japan was down 0.91%.

Futures contracts for the Dow Jones Industrial Average, S&P 500 and Nasdaq 100 as well Trading in the negative territory During noon Asian time on Thursday.

Thursday’s moves come on the heels of markets faltering earlier this week after initial news of a strong move by the Federal Reserve and fears of more Covid-related restrictions in mainland China.

Fed rate hike

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The Dow Jones Industrial Average snapped a five-day losing streak, as it jumped 303.70 points, or 1%, to close at 30,668.53. The S&P 500 rose 1.46% to 3789.99 while the Nasdaq Composite rose 2.5% to end the day at 11099.15.

The Federal Reserve said in a statement It was committed to bringing inflation – currently high at 8.6 per cent – to 2 per cent. It also said it would continue to reduce its holdings of Treasury securities, agency debt and agency mortgage-backed securities.

Kevin O’Leary, chairman of O’Shares ETFs, says a 75 basis point rate hike is a signal that the Fed has “a spike in inflation” now.

He added that a 1% hike would be better but for now, all signs point to “light” Fed inflation.

Crucially, while the Fed made no mention of another 75 basis point rate hike at its July meeting, it reiterated its commitment to bring inflation back to the 2% target and that means the Fed may be willing to sacrifice the economy to make it happen, JP Kerry says Craig, global market strategist at Morgan Asset Management.

“From our point of view, the risks surrounding a 2023 recession cannot be ignored,” Craig said.

Clifford Bennett, chief economist at ACC Securities, said a recession was imminent now that the Fed signaled its intention to rein in inflation and “ignored that this could cause more economic pain.”

Currency and oil

The US dollar indexwhich measures the greenback against a basket of peers, was at 105.261 – above the previous low of 104.707.

The Japanese Yen It was trading at 133.74 per dollar, which is still stronger compared to earlier in the week when it was at levels above 135 against the dollar. The Australian dollar It was at $0.6977, retreating from the previous high of $0.7035.

Oil prices rose in the afternoon of Asian trading hours, with the international benchmark Brent crude futures contracts It rose 0.47% to $119.07 a barrel. US crude futures contracts It also rose 0.51% to $115.90 a barrel.

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