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Asia-Pacific markets are mostly higher after the Fed hikes rates


SINGAPORE — Shares in the Asia-Pacific region climbed on Thursday following the U.S. Federal Reserve’s decision to raise rates by 75 basis points to fight inflation, a move that was widely expected.

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

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

The Kospi in South Korea advanced 0.88%, while the Kosdaq gained 0.99%.

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

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

Fed Chair Jerome Powell’s guidance about the central bank’s next moves boosted U.S. stocks overnight.

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

Expectations for a 50 basis point increase in September were at 65% on Thursday morning in Asia, according to the CME Group’s FedWatch Tool. The Fed says it is strongly committed to reducing inflation.

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

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

In Asia, Australia’s retail sales data is due Thursday. Economists polled by Reuters predict that retail sales for June grew 0.5%, compared to 0.9% in May.

Thailand’s market is closed for a holiday Thursday.

Samsung will report second-quarter earnings after “better than feared” earnings guidance early this month led to a rally in chip stocks.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was 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 was at $0.6995 as the U.S. dollar weakened.

Oil futures rose on Thursday morning in Asia. U.S. crude gained 0.68% to $97.92 per barrel, while Brent crude advanced 0.49% to $107.14 per barrel.

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

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