Nikkei bucks declines in most Asian markets as potential Fed hike eyed – CNBC

5 months ago Comments Off on Nikkei bucks declines in most Asian markets as potential Fed hike eyed – CNBC

Most Asian markets lost ground Wednesday as traders moved their chips amid concerns the U.S. Federal Reserve may hike interest rates soon, with Japan’s shares turning negative in topsy-turvy trade.

The Federal Open Market Committee is scheduled to release its April meeting minutes at 2 p.m. ET Wednesday and many analysts are concerned the minutes could be more hawkish than the statement that followed April’s meeting.

That concern got some juice from comments by San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart, who said the Fed could still raise rates two or three times this year, according to a Reuters report.

The benchmark Nikkei 225 index shed 0.62 percent after oscillating between positive and negative territories throughout the session as traders were likely weighing whether the good news from better-than expected economic growth data, released shortly before market open, was good or bad news for markets.

Japan’s gross domestic product (GDP) for the January-to-March period grew faster than expected, with real GDP rising 0.4 percent on quarter compared with a Reuters poll forecast for 0.1 percent growth. Annualized GDP for the period grew 1.7 percent, compared with expectations from a Reuters poll for 0.2 percent growth.

The market had expected that a poor reading would spur additional easing measures from the Bank of Japan (BOJ) – in other words, that bad news would have been good news for traders.

Shares turned higher as traders appeared to focus on the benefits to the market if the Fed hikes rates, a move which would strengthen the U.S. dollar, but those gains proved short-lived.

The yen also wavered in reaction to the data. A weaker yen is generally considered a positive for the country’s equities, particularly exporters, which will see their profits flattered when overseas earnings are repatriated. The Japanese currency climbed as high as 108.70 against the U.S. dollar and as weak as 109.37, compared with around 109.09 before the data. At 1:07 p.m. SIN/HK time, the U.S. dollar was fetching 109.08 yen.

Other markets in the region were mostly lower.

Down under, the S&P/ASX 200 was down 0.67 percent, dragged by a 0.76 percent decline in the heavily weighted financials sub-index. That was offset by continued gains in the energy sector, which added 0.44 percent.

Hong Kong’s Hang Seng Index shed 1.69 percent, while on the mainland, the Shanghai Composite fell 1.86 percent and the Shenzhen Composite lost 2.68 percent. South Korea’s Kospi index shed 0.71 percent.

Nikkei bucks declines in most Asian markets as potential Fed hike eyed – CNBC}