The Nikkei 225 index climbed 2.1% to 37,155.33, Hang Seng advanced 1.9% to 17,993.30, the Shanghai Composite index jumped 0.7% to 2,736.51, while South Korea’s Kospi gained 0.2% to 2,579.86
Asian markets forged higher on Thursday after the Federal Reserve started its efforts to prevent a recession in the U.S. with a bigger-than-usual cut to interest rates.
In Tokyo, the Nikkei 225 index climbed 2.1% to 37,155.33, lifted by major export manufacturers’ shares. Toyota Motor Corp. climbed 5.1%, Sony Group Corp. gained 2.9% and Hitachi Ltd. added 5.8%.
Hong Kong’s Hang Seng advanced 1.9% to 17,993.30.
The Shanghai Composite index jumped 0.7% to 2,736.51, while Taiwan’s Taiex was 1.7% higher.
South Korea’s Kospi gained 0.2% to 2,579.86.
The Bank of Japan and the Bank of England are also holding monetary policy meetings this week. Neither central bank is expected to move on rates, though the language of what the officials say could be an indicator of later moves and still influence markets.
Because the Fed’s half-percentage point rate cut was so well expected, markets had already jumped in anticipation. So, Wall Street’s reactions to the turn on its policy rate were relatively muted.
Markets barely reacted to the Fed’s 50 bp rate cut, on balance, and our base case is that further cuts won’t move the needle too much either, Thomas Mathews of Capital Economics said in a commentary.
It was the first cut to the federal funds rate in more than four years, ending a stretch where the Federal Reserve kept rates at a two-decade high to slow the U.S. economy enough to stifle the worst inflation in generations.
On Wednesday, the S&P 500 slid 0.3%, closing at 5,618.26. The Dow Jones Industrial Average slipped 0.2% to 41,503.10. The Nasdaq composite declined 0.3% to 17,573.30.
