/ AFP / Toshifumi Kitamura
HONG KONG, China (AFP) — Asian investors on Wednesday struggled to track a record close on Wall Street as they await the Federal Reserve’s latest policy meeting hoping for a guide on its plans for monetary policy.
The central bank is all but certain to lift interest rates after its meeting ends later in the day but the main focus will be on chair Janet Yellen’s comments afterwards.
Some analysts suggest the rise could be the Fed’s last this year as traders fret over tepid inflation and the future of Donald Trump’s big-spending, tax-cutting agenda. Hopes for those policies had fuelled expectations of a surge in prices — and a jump in borrowing costs — but is now in trouble as the tycoon in enveloped in political crises.
“With the rate hike now 96 percent priced in focus will fall on the Fed’s forward guidance and importantly their views surrounding low inflation,” Stephen Innes, senior trader at OANDA, said in a note.
The dollar moved in a tight range against the yen in Asia ahead of the Fed announcement, while equity markets were subdued despite a strong lead from Wall Street, where the Dow and S&P 500 ended at record highs.
Tokyo ended the morning session 0.1 percent higher, while Sydney was up 0.6 percent.
But Hong Kong and Shanghai each slipped 0.5 percent, while Seoul was off 0.3 percent and Singapore gave up 0.1 percent. Taipei fell 0.6 percent.
The pound managed to hold its gains after bouncing on news Tuesday that British consumer inflation spiked to a near four-year high of 2.9 percent in June.
The reading comes as the Bank of England concludes its own policy meeting Thursday and will put pressure on the policy board to hike rates within its two percent target. British inflation had held close to zero throughout 2015 — but has surged since then as a weak Brexit-hit pound raises import costs.
The pound on Friday tumbled to a seven-week low at $1.2636 in the wake of Thursday’s election result that saw the ruling Conservatives lose their majority, days before it begins crucial talks on leaving the European Union.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.1 percent at 19,919.09 (break)
Hong Kong – Hang Seng: DOWN 0.5 percent at 25,730.20
Shanghai – Composite: DOWN 0.5 percent at 3,138.68
Pound/dollar: DOWN at $1.2750 from $1.2752 at 2030 GMT
Euro/dollar: UP at $1.1213 from $1.1206
Dollar/yen: DOWN at 110.05 yen from 110.06 yen
Oil – West Texas Intermediate: DOWN 53 cents at $45.93 per barrel
Oil – Brent North Sea: DOWN 48 cents at $48.24 per barrel
New York – Dow: UP 0.4 percent at 21,328.47 (close)
London – FTSE 100: DOWN 0.2 percent at 7,500.44 (close)
© Agence France-Presse