ASIAN markets swung on Thursday as investors considered the prospect of more US interest rate hikes and Donald Trump’s latest broadside in his trade war with China.
The US central bank lifted borrowing costs for the third time this year, as expected, citing an increasingly strong economy and jobs market, with governor Jerome Powell saying he saw no vulnerabilities in the financial system.
The post-meeting statement removed mention of being “accommodative”, which was seen as symbolically important as observers said it indicated the bank is moving away from the days of lower rates. However, Powell said this did not mean the Fed would tighten policy more quickly.
Still, the bank is widely expected to lift rates again in December, while analysts are betting on another three in 2019.
Powell said there remained risks from trade tensions, which could lift inflation, but added it was too soon to tell what impact it would have.
In Asia, markets fluctuated but by the end of the morning Tokyo was down 0.1 percent, while Singapore added 0.5 percent and Seoul rose 0.6 percent.
Hong Kong edged up 0.2 percent, Shanghai shed 0.2 percent, and Sydney was flat.
Trump ramped up his criticism of China on Wednesday, accusing it of trying to sway November’s mid-term elections against his Republican party because of the trade row and admitting his relationship with President Xi Jinping may have been permanently damaged.
His comments will do little to ease concerns about an all-out trade war between the two economic giants, which have exchanged tariffs on billions of dollars worth of goods.