Asian Stocks Rise After Fed Rate Hike

Asian stocks moved higher on Thursday as investors digested the Federal Reserve’s first interest-rate hike since 2023 and Chair Kevin Warsh’s inflation-focused outlook. The Fed unanimously increased its benchmark rate by 25 basis points to 3.75%-4%, while projections indicated another increase could come this year.

U.S. stock futures recovered during Asian trading after Wall Street declined following the Fed decision. Nasdaq 100 futures gained 0.6%, while S&P 500 futures advanced 0.7%. Money markets are pricing roughly a 50% probability of another Fed hike in October, with a December increase fully priced.

U.S. Treasury yields eased after their recent surge. The two-year yield slipped one basis point to 4.72%, while 10-year and 30-year yields fell about two basis points each.

Across Asia, the MSCI Asia Pacific Index rose 0.4%. Japan’s Nikkei 225 gained 0.4%, South Korea’s KOSPI advanced 0.3%, and Japan’s TOPIX climbed 0.7%. Hong Kong’s Hang Seng fell 1.1%, while China’s CSI 300 declined 0.4%.

Asian semiconductor stocks were mixed as investors assessed higher borrowing costs and uncertainty surrounding artificial intelligence spending. SK Hynix fell 0.9%, Kioxia declined 2%, and Murata Manufacturing dropped 2.4%. Chinese chipmakers also traded unevenly, with NAURA Technology gaining 0.7% while SMIC lost 2.4%.

Elsewhere, Australia’s S&P/ASX 200 rose 0.3%, New Zealand’s NZX 50 climbed 0.9%, and the Philippines’ PSEi gained 0.79%. Thailand’s SET advanced 0.9%.

Oil prices eased as Middle East supply concerns moderated. Brent crude traded near $105.75 per barrel after falling as much as 5% on Wednesday. Saudi Arabia is seeking to restore about half of its East-West pipeline capacity within days following drone attacks.

Investors are now turning their attention to upcoming Bank of England and Bank of Japan decisions. The BOE is expected to keep rates unchanged, while the BOJ is expected to raise rates and signal that additional monetary tightening remains possible.