Asian markets mixed after US Fed rate cut
The US Federal Reserve cut interest rates by a quarter of a percentage point and indicated it will steadily lower borrowing costs for the rest of this year.
A woman walks past a stock quotation board showing the Nikkei share average outside a brokerage in Tokyo, Japan, on Sep 8, 2025. (File photo: Reuters/Kim Kyung-hoon)
SINGAPORE: Asian markets were mixed in early trading on Thursday (Sep 18) after the United States Federal Reserve (Fed) cut interest rates for the first time this year.
Japan's Nikkei share average rose to an intraday record high, led higher by technology shares, but gains were limited after the recent strength in the yen that weighed on exporters.
The Nikkei 225 Index rose 0.3 per cent to 44,938.40 in early trade, and briefly touched 45,055.99, surpassing the previous record set earlier in the week. The broader Topix was down 0.1 per cent.
The largest percentage gainers in the index were Resonac Holdings, which surged 8.7 per cent, followed by Screen Holdings, jumping 4.8 per cent.
Tokyo Electric Power, down 4.4 per cent, saw the largest loss in the index, followed by Tokyo Gas, which slid 4.1 per cent.
The benchmark KOSPI was up 0.38 per cent, at 3,426.37 as of 9.47am in South Korea (8.47am, Singapore time), led by gains for heavyweight chipmakers.
Samsung Electronics rose 1.21 per cent while SK Hynix gained 3.6 per cent, resuming a rally on artificial intelligence optimism.
Among other index heavyweights, battery maker LG Energy Solution slid 0.43 per cent, while Hyundai Motor and sister automaker Kia were up 0.12 per cent and 0.30 per cent, respectively.
Gains in South Korea, Japan and Taiwan steadied MSCI's broadest index of Asia-Pacific shares outside Japan, which edged 0.1 per cent lower, as declines in Australian and New Zealand markets weighed on the wider benchmark.
Stocks in Singapore and Hong Kong briefly dipped, with the Straits Times Index and Hang Seng Index down by 0.14 per cent and 0.19 per cent respectively at around 10am.
Hong Kong’s performance came after its central bank on Thursday cut its base interest rate charged via the overnight discount window by 25 basis points to 4.50 per cent, in a move that tracked the Fed’s decision.
HKMA Chief Executive Eddie Yue said the reduction will have a positive impact on the city's property market and economy, noting that financial and monetary markets continue to operate in a smooth and orderly manner.
Yue said the Fed might cut rates further by 50 basis points before the end of the year, though he added that "the extent and pace of future US interest rate cuts are subject to uncertainty".
The US Fed cut interest rates by a quarter of a percentage point on Wednesday and indicated it will steadily lower borrowing costs for the rest of this year, as policymakers responded to signs of weakness in the job market.
The cut, the first move by the policy-setting Federal Open Market Committee since December, lowered the policy rate to the 4 per cent to 4.25 per cent range.
Two more quarter-percentage-point reductions are anticipated at the remaining two policy meetings this year, while just one is projected for next year – less than expected.
Jeremy Tan, CEO of Tiger Fund Management, the fund management arm of online brokerage Tiger Brokers, said the cuts are positive for Asian currencies and assets.
“Given that the Fed has been behind the cycle (in rate cuts) but is now picking up pace ... the interest rate in terms of differential against Asian peers will start to narrow. As a result ... there will be more capital flow into Asia, especially into 2026,” he told CNA938.
“Investors are (also) diversifying away from dollar denominated assets into other currencies or asset classes. (Indices of) Asian economies like China, Singapore and Japan ... have soared to highs in the near term and I think this momentum will continue.”
