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Asian Equities Rise After FOMC Statement; Trump’s Comments on Trade in Focus

Investing.com - Asian equities rose in morning trade on Thursday after the U.S. Federal Reserve ruled out interest rate hikes in 2019, citing slowing economic growth in the U.S.

On Wednesday, the Fed kept interest rates unchanged and indicated that there would be no more hikes this year. The statement was a shift from its stance three months ago, when it projected two interest rate hikes for this year.

“We don’t see data coming in that suggest that we should move in either direction. They suggest that we should remain patient and let the situation clarify itself over time,” Fed Chairman Jerome Powell said in a press conference. “It may be some time before the outlook for jobs and inflation calls clearly for a change in policy.”

China’s Shanghai Composite and the SZSE Component both gained 0.4% by 10:20 PM ET (02:20 GMT). Hong Kong’s Hang Seng Index edged up 0.1%.

Smartphone maker Xiaomi Corp (HK:1810) extended its losses after slumping more than 4.5% on Wednesday despite posting the previous day a fourth-quarter earnings report that beat expectations.

South Korea’s KOSPI rose 0.7%.

Down under, Australia’s ASX 200 declined 0.5% after data showed the country’s jobless rate fell to a near eight-year low in February. The participation rate fell to 65.6% from 65.7% as fewer people went looking for work. That sent the jobless rate to the lowest level since June 2011 at 4.9%.

“Some employment reports are more keenly anticipated than others. Today was one of those reports that felt like a big one given the ongoing disconnect between the activity data and monthly updates on the labour market. It was also the employment report that followed the weak Q4 national accounts published two weeks ago,” Gareth Aird, senior economist at Commonwealth Bank of Australia, said in a note that was cited by CNBC.

“Today’s data essentially validates why the (Reserve Bank of Australia) has said that the next move in interest rates could be up or down,” Aird said.

Japan’s stock markets are closed on Thursday for a holiday.

In other news, investors continue to keep a lookout for developments on the U.S.-China trade front, as US President Donald Trump said he’ll keep tariffs on China “for a substantial period of time.”

“We’re not talking about removing them, we’re talking about leaving them for a substantial period of time, because we have to make sure that if we do the deal with China that China lives by the deal,” Trump told reporters at the White House on Wednesday. “They’ve had a lot of problems living by certain deals.”

His comments confused some traders, as he also said a deal is “coming along nicely.”

Citing people familiar with the matter, Bloomberg reported the previous day that U.S. officials are concerned that China might refuse to accept U.S. demands in the countries’ ongoing trade talks.

Chinese officials have shifted their stance due to the lack of assurances from the U.S. that tariffs imposed on their products would be removed, even after agreeing to changes to their intellectual-property policies, the people added.


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