Asia-Pacific markets gain after Fed rate hike

SINGAPORE — Stocks in the Asia-Pacific region rose Thursday after the US Federal Reserve’s decision to raise interest rates by 75 basis points to fight inflation, a move widely expected.

Japan’s Nikkei 225 rose 0.83%, while the Topix index rose 0.37%.

In Australia, the S&P/ASX 200 was up 0.35%.

South Korea’s Kospi rose 0.88%, while the Kosdaq gained 0.99%.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan rose 0.48%.

The rate hike brings the Fed funds rate to its highest level since December 2018.

Fed Chair Jerome Powell’s guidance on the central bank’s next moves boosted US stocks overnight.

“As the stance of monetary policy tightens further, it will likely become appropriate to slow the pace of increases as we assess how our cumulative policy adjustments affect the economy and inflation,” he said.

According to the CME Group’s FedWatch Tool, a 50 basis point increase in September was expected to reach 65% on Thursday morning in Asia. The Fed says it is strongly committed to curbing inflation.

Powell also said he doesn’t think the US is currently in a recession.

The Dow Jones Industrial Average rose 436.05 points, or about 1.4%, to 32,197.59. The S&P 500 was up 2.62% to close at 4,023.61 and the Nasdaq Composite was up 4.06% to 12,032.42 a day after Alphabet and Microsoft’s quarterly results.

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The US dollar index, which tracks the greenback against a basket of its peers, stood at 106,366. It fell sharply after the Fed rate hike.

The Japanese yen traded at 136.08 per dollar after weakening past the 137 level this week. The Australian dollar stood at $0.6995 as the US dollar weakened.

Oil futures rose in Asia Thursday morning. US crude rose 0.68% to $97.92 a barrel, while Brent crude rose 0.49% to $107.14 a barrel.

— Jeff Cox, Tanaya Macheel, Carmen Reinicke and Arjun Kharpal of CNBC contributed to this report.

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