Asia-Pacific markets mostly rise as investors react to Fed minutes

SINGAPORE — Asia-Pacific markets were mostly higher on Thursday as investors watch for market reaction to the latest Fed minutes.

Japan’s Nikkei 225 gained 0.27%, and the Topix index rose 0.15%.

In South Korea, the Kospi advanced 1.17% after closing more than 2% lower on Wednesday, and the Kosdaq climbed around 1%.

Samsung Electronics shares rose 2.3% after the company released earnings guidance for the second quarter of 2022. Operating profit likely rose to 14.1 trillion won ($10.8 billion) in the April to June quarter, up from 12.57 trillion won a year ago.

The S&P/ASX 200 was just above the flatline. MSCI’s broadest index of Asia-Pacific shares outside Japan was fractionally lower.

Hong Kong’s Hang Seng index slipped 1% in early trade.

Mainland China markets were mixed. The Shanghai Composite were slightly lower, and the Shenzhen Component rose 0.3%.

Beijing said Covid vaccinations would be required to enter crowded places such as cinemas and gyms in the city starting next week. Mainland China markets fell on Wednesday as Covid concerns came back into focus.

Federal Reserve officials recognized that a “more restrictive stance” in policy could be suitable if inflation doesn’t ease, even if it slows the economy, the meeting minutes said.

“Participants recognized that policy firming could slow the pace of economic growth for a time, but they saw the return of inflation to 2 percent as critical to achieving maximum employment on a sustained basis,” the document said.

Fed officials also said a hike of 50 or 75 basis points would be likely at the July meeting.

The Federal Open Market Committee is concerned about inflation expectations becoming unanchored, a ANZ research note said on Thursday.

“The Fed is understandably eager to reinforce to the public that it has got this, and hiking 75bp [and signaling many more hikes to come] certainly reinforces the message,” the note said.

Anthony Raza of UOB Asset Management told CNBC’s “Squawk Box Asia” on Thursday that the Fed’s “hands are tied at this point.”

“It’s really just clear they’re on this rate hiking path purely until inflation cools off,” said Raza, who is head of multi-asset strategy. “I think that’s going to be a slow process,” he added, estimating that it will take around a year.

U.S. markets gained slightly on Wednesday stateside.

The Dow Jones Industrial Average rose 69.86 points, or 0.23%, to 31,037.68. The S&P 500 advanced 0.36% to 3,845.08, and the Nasdaq Composite traded 0.35% higher to close at 11,361.85.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 107.028, continuing to strengthen sharply.

The Japanese yen traded at 135.63 per dollar, and the Australian dollar was at $0.6783.

Oil futures continued to slide in Asia trade after tumbling earlier in the week.

U.S. West Texas Intermediate futures fell 1.2% to $97.35 per barrel, and Brent crude futures slipped 1.41% to $99.27 per barrel.

The U.S. crude benchmark settled 1% lower on Wednesday after an 8% tumble on Tuesday. The international benchmark settled 2% down at $100.69 after falling below the $100 level during Wednesday’s session.