Commercial and residential buildings in Minato-ku, Tokyo, Japan, Saturday, October 1, 2022.
Akio Chika | Bloomberg | Getty Images
Asia-Pacific markets were mixed on Tuesday after Federal Reserve Chairman Jerome Powell said the central bank’s recent sharp interest rate cuts should not be interpreted as a sign that future moves will be so aggressive.
“This is not a committee that is rushing to cut rates quickly,” he said during a question-and-answer session following a speech with Morgan Stanley economist Ellen Zentner. “If the economy performs as expected, that would mean two more rate cuts this year, for a total of 50 basis points.”
The federal funds rate is currently 4.75%-5%, and it is expected to cut interest rates by another 50 basis points. By the end of 2024, the Fed’s benchmark interest rate will reach 4.25%-4.5%.
In Asia, traders will focus on The Bank of Japan’s third quarter Tankan survey, This indicator measures the business optimism of Japan’s largest companies.
Business optimism among Japan’s largest manufacturers was +13, unchanged from the previous quarter and in line with forecasts in a Reuters poll.
Separately, sentiment among Japan’s large non-manufacturers improved, rising slightly to +34 from +33 in the second quarter, beating Reuters’ forecast of +32. A positive number means there are more optimists than pessimists, and vice versa.
The Bank of Japan also issued Summary of comments The Sept. 19-20 meeting comes a day after the Fed cut interest rates by 50 basis points and ahead of last week’s election for the ruling Liberal Democratic Party.
The BOJ made no changes to its benchmark interest rate at that meeting, and a summary of the opinions showed that at least one board member believed a rate hike was “undesirable” as it would indicate the bank was moving toward a full rate hike. Tightening cycle.
Another BOJ board member believes that “if the BOJ does not raise policy rates at a certain pace, the Japanese economy will not fall behind the curve.” Therefore, the member said, “In a situation where financial and capital markets are unstable, Next, the central bank will not raise policy interest rates.”
Japan also reported unemployment rate It slowed to 2.5% in August, down from 2.7% in July and below the 2.6% forecast by economists polled by Reuters.
Some Asian markets were closed on Tuesday for a public holiday, including South Korea, Hong Kong and mainland China. Markets in mainland China will be closed for the rest of the week due to the Golden Week holiday.
Japanese Nikkei 225 Index After falling 4.8% on Monday, it rebounded 1.73% today, and the Topix rose 1.43% on Tuesday.
Australia’s S&P/ASX 200 index fell 0.47%, retreating from all-time highs.
Overnight, the U.S. S&P 500 index rose to a record close on Monday, capping a month and quarter of gains. The index rose 0.42% to close at 5,762.48 points.
The Dow Jones Industrial Average also set a new record, rising slightly to close at 42,330.15 points. The Nasdaq index of technology stocks rose 0.38%
—CNBC’s Alex Harring and Hakyung Kim contributed to this report.
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