Gains in Japan and Hong Kong led an otherwise mixed early Asian stock session Thursday after the Federal Reserve signaled it will likely keep U.S. interest rates on hold throughout 2020 amid a solid economy.
U.S. stocks gained slightly, the 10-year Treasury yield fell below 1.8% and the dollar DXY, -0.37% held losses in response to the Fed’s update.
“The Fed offered up a surprising holiday season dovish delight for the market,” said Stephen Innes, chief Asia market strategist with AXI Trader.
Japan’s Nikkei NIK, +0.29% rose 0.2%, while Hong Kong’s Hang Seng Index HSI, +1.26% was up 1.1%. The Shanghai Composite SHCOMP, -0.14% slipped 0.2%, while the Shenzhen Composite 399106, +0.18% also eased slightly.
The Dow Jones Industrial Average DJIA, +0.11% closed up 0.1%, while the S&P 500 index SPX, +0.29% closed 0.2% higher and the Nasdaq Composite Index COMP, +0.44% rose 0.4%. All three U.S. benchmarks ended Tuesday within 1% or less of their record closes set nearly two weeks ago on Nov. 27, according to Dow Jones Market Data.
The Fed announced it was holding interest rates steady as was widely expected, but added that it expected to make no changes in either direction throughout 2020. It has said trade conflicts bear watching.
Bullish global stock investors are hoping for a delay to the Dec. 15 deadline for new tariffs on some $160 billion of consumer goods shipped from China to the U.S., which could be seen as a sign of progress for bigger-picture trade talks. U.S. President Donald Trump is expected to meet with top trade advisers on Thursday to discuss those planned tariffs, three sources familiar with the plans told Reuters.
So far, reports from the administration have been conflicting. White House advisers Larry Kudlow and Peter Navarro have both indicated that tariffs scheduled to hit Chinese goods on Dec. 15 are “still on the table,” following a report from the Wall Street Journal in which talk participants that said both parties were bracing for a delay of a tariff increases on China goods on Sunday.
“President Trump is impossible to predict. So, unless you have some idea of the content of the Trump Twitter feed in advance, I suspect most traders will likely err on the side of caution and remain sidelined,” said Innes. “But looking at the current price action in [the S&P 500] and [the Chinese yuan], you don’t get the impression that investors even remotely think the U.S. will impose December tariffs which could derail a trade deal.”
Also keeping the market’s attention, a meeting of the European Central Bank on Thursday is expected to produce no surprises. The U.K. holds a general election Thursday.
Benchmark crude oil CLF20, +0.19% gained 14 cents to $58.90 per barrel in electronic trading on the New York Mercantile Exchange.
The dollar USDJPY, +0.01% eased to 108.53 Japanese yen from 108.73 yen Wednesday.
The Associated Press contributed.