Asian Stocks Trade Mixed After Fed's Rate Hike — Update

By Amanda Lee and Megan Cheah

Asian stocks were mixed Thursday afternoon, while government bond yields in the region erased earlier declines after the Federal Reserve delivered its first interest-rate increase in three years.

The U.S. central bank unanimously raised the benchmark federal-funds rate by a quarter percentage point to a range of between 3.75% and 4%. The move marked a sharp policy reversal, beginning to unwind last year's rate cuts while implicitly undercutting the White House's assertions that inflation isn't a concern.

Fed Chairman Kevin Warsh struck a decidedly hawkish tone, saying that "inflation is too high and has been for too long."

There are no immediate signs that U.S. inflation is easing, particularly amid the continuing stalemate in the Middle East, said Tai Hui, APAC chief market strategist at J.P. Morgan Asset Management.

"This means the Fed may need to continue to tighten in order to achieve its target. It may wait until December given the October meeting is only a few days ahead of the mid-term elections," he added.

In regional equity trading, Japan's Nikkei Stock Average was last up 0.3%, Taiwan's Taiex gained 1.1% and South Korea's Kospi gained 0.8%. However, the Shanghai Composite fell 0.4% and Hong Kong's Hang Seng Index was 0.7% lower.

The debate over the pace of development of frontier artificial-intelligence models and the prospects of higher interest rates could pressure growth stocks, the JPMAM strategist said. Conversely, resilient economic growth and higher rates could benefit sectors such as financials and industrials, he added.

Asian government-bond yields were also mixed, some erasing earlier declines. Japan's 10-year sovereign debt was up half a basis point at 3.000%, Australia's 10-year government bonds dropped 2.9 basis points to 5.325% and New Zealand's 10-year sovereign securities declined 1.3 basis point to 5.003%. Bond yields move inversely to prices.

Meanwhile, oil prices declined as concerns about Middle Eastern supplies eased, even as the protracted conflict showed no immediate sign of resolution.

The softer prices likely reflect optimism about containing the impact of the severe disruption to Middle Eastern crude-oil exports, XS.com's Samer Hasn said in a note, citing reports that Saudi Arabia was shifting crude loadings away from the out-of-service Yanbu port.

Front-month West Texas Intermediate crude oil futures were down 0.25% at $102.17 a barrel, while Brent was 0.1% lower at $105.71 a barrel, according to ICE data.

Write to Amanda Lee at amanda.lee@wsj.com and Megan Cheah at megan.cheah@wsj.com.

(END) Dow Jones Newswires

September 17, 2026 01:43 ET (05:43 GMT)