On Wednesday, Asian stock markets exhibited mixed performances as new indicators of a robust U.S. economy complicated the forecast for potential U.S. interest rate reductions anticipated in 2025.
U.S. Treasury securities remained steady following a decline across the yield curve during the previous trading session. This followed the U.S. government's monthly auction of 10-year notes, which attracted the highest yields seen since 2007. The auction coincided with encouraging news regarding U.S. service sector activity and the number of job openings.
Meanwhile, the dollar maintained its strength, and the Japanese yen edged towards the intervention levels seen last year. Gold prices remained relatively stable, hovering below $2,650 per ounce, influenced by the Federal Open Market Committee's (FOMC) hawkish stance on interest rates.
Raphael Bostic, President of the Federal Reserve Bank of Atlanta, emphasized on Tuesday the need for careful consideration in policy decisions due to uneven progress in reducing inflation.
Oil prices climbed as evidence of decreased supplies from Russia and OPEC members emerged, alongside industry data indicating another decline in U.S. oil inventories.
China's Shanghai Composite index fell by 0.3%, with the yuan reaching its lowest level since September 2023, despite renewed efforts by the nation's central bank to bolster the currency.
Hong Kong's Hang Seng index slipped by 0.5%. A Bloomberg report highlighted that banks, including HSBC Holdings and Standard Chartered, were accumulating cash and liquidity, notwithstanding government appeals to support struggling small businesses with loans.
Japan's Nikkei index decreased by 0.4%, even as technology stocks like Advantest and Tokyo Electron surged despite a downward trend in U.S. tech stocks the previous night, sparked by investor dissatisfaction with a product presentation from Nvidia.
South Korea's Kospi index rose by over 1%, driven by advances in tech and healthcare stocks. Samsung Electronics saw a 2.7% increase, despite profit forecasts falling well short of expectations.
In Australia, the S&P/ASX 200 index climbed by 0.6% as a drop in the core inflation rate strengthened the argument for a potential rate cut by the Reserve Bank of Australia as early as next month.
Across the Tasman Sea, New Zealand's S&P/NZX-50 index recorded a slight increase. U.S. stock markets faced declines overnight, with renewed concerns over inflation and interest rates arising from positive economic data releases.
The Nasdaq Composite, heavy in tech stocks, fell by 1.9%, the S&P 500 declined by 1.1%, and the Dow Jones Industrial Average decreased by 0.4% as yields on the benchmark 10-year note reached an eight-month peak.
U.S. service sector growth accelerated in December, with a measure of input prices nearing a two-year high. Meanwhile, job openings saw an unexpected rise in November, leading traders to extend their projections for when the Federal Reserve might begin cutting interest rates.
In Europe, stocks mostly closed higher on Tuesday, despite data revealing that inflation in the eurozone reached its highest level in five months for December.
The pan-European STOXX 600 index gained 0.3%. Germany's DAX and France's CAC 40 both increased by 0.6%, whereas the U.K.'s FTSE 100 ended slightly lower.
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