Today’s stock market: Asian markets mirror Wall Street fluctuations following Fed decision to maintain high interest rates

Asian markets experienced volatility on Thursday following the Federal Reserve’s decision to delay cuts to interest rates. U.S. futures surged and oil prices rose, impacting trading in the region.

In Tokyo, the Nikkei 225 index initially opened with a decline but later climbed 0.1% to 38,299.71. The Japanese yen saw significant fluctuations, surging 2% in early Asia hours before reversing course and erasing previous gains. The dollar was trading at 156.04 yen by midday.

South Korea’s Kospi edged 0.1% lower, while Hong Kong’s Hang Seng index added 2.3% and Australia’s S&P/ASX 200 advanced 0.5%.

The Federal Reserve’s decision to maintain its main interest rate at its highest level since 2001 had mixed effects on U.S. markets. The S&P 500 fell 0.3%, the Dow Jones Industrial Average rose 0.2%, and the Nasdaq composite lost 0.3%.

Federal Reserve Chair Jerome Powell’s comments on inflation and interest rates influenced market sentiment. Powell acknowledged the lack of progress towards the 2% inflation target and indicated that rate cuts may take longer than expected. However, he reassured that it was unlikely the next policy rate move would be a hike.

The Fed’s announcement of slowing the pace of shrinking its holdings of Treasurys provided some stability to financial markets. Traders had already adjusted their expectations for rate cuts this year, with reports showing inflation remaining higher than forecasted.

In energy trading, U.S. crude oil prices rose after three days of decline, while the euro strengthened against the dollar. The market remains cautious as investors await further developments on interest rates and inflation.