TOKYO, 14th March, 2024 (AP/ WAM) -- Asian shares mostly declined Thursday in lackluster trading after U.S. stocks drifted to a mixed finish.
Japan's Nikkei 225 shed 0.2 percent in morning trading to 38,625.22.
Sydney's S&P/ASX 200 slipped nearly 0.2 percent to 7,716.50. South Korea's Kospi added 0.7 percent to 2,711.48. Hong Kong's Hang Seng lost 0.4 percent to 17,010.59, while the Shanghai Composite stood virtually unchanged at 3,044.17.
“In a significant turn of events, there’s increasing speculation that the Bank of Japan might consider ending its negative interest rate policy in its upcoming meeting, spurred by substantial wage hikes by major Japanese firms,” says Anderson Alves at ActivTrades.
The Japanese central bank has a target of achieving 2 percent inflation. The Bank of Japan will hold a two-day monetary policy meeting next week.
On Wall Street, the S&P 500 slipped 9.96 points, or 0.2 percent, from its all-time high set a day before to 5,165.31. The Dow Jones Industrial Average rose 37.83, or 0.1 percent, to 39,043.32 and pulled within 90 points of its record set last month. The Nasdaq composite dipped 87.87, or 0.5 percent, to 16,177.77.
The bond market was also relatively quiet, with Treasury yields ticking higher, while stock markets abroad were mixed after making mostly modest moves.
Oil prices have been on a general upswing so far this year, which has helped keep inflation a bit higher than economists expected. That higher inflation has in turn dashed Wall Street’s hopes that the Federal Reserve could start offering relief at its meeting next week by cutting interest rates.
But the expectation is still for the Fed to begin cutting rates in June, because the longer-term trend for inflation seems to remain downward. The Fed’s main interest rate is at its highest level since 2001, and reductions would release pressure on the economy and financial system. Stocks have already rallied in part on expectations for such cuts.
In the bond market, the yield on the 10-year Treasury rose from 4.15 percent late Tuesday to 4.18 percent on Wednesday. It helps set rates for mortgages and loans for all kinds of companies and other borrowers.
The two-year Treasury yield also climbed. It more closely follows expectations for the Fed, and it rose to 4.62 percent from 4.58 percent late Tuesday and from 4.20 percent at the start of February. It had earlier dropped on strong expectations for coming cuts to interest rates by the Fed.
In energy trading, benchmark U.S. crude added 12 cents to US$79.84 a barrel. Brent crude, the international standard, rose 14 cents to US$84.17 a barrel.
In currency trading, the U.S. dollar rose to 147.83 Japanese yen from 147.74 yen. The euro cost US$1.0947, down from US$1.0953.