Asian Shares Wobble On Fed's Mixed Messages

(RTTNews) - Asian stocks fluctuated on Thursday after mixed signals from Federal Reserve Chief Jerome Powell on the outlook for inflation and interest rates.

After leaving interest rates steady on Wednesday, the Fed signaled that it is still leaning toward eventual reductions in borrowing costs, but needs more evidence that prices are cooling before cutting interest rates.

Mainland Chinese markets remained closed for the Labour Day holidays. Hong Kong's Hang Seng index jumped 2.50 percent to 18,207.13 as traders returned to their desks after a holiday.

Japanese markets ended little changed as the yen slipped to the lower 155 range against the U.S. dollar after rising as high as 153 overnight on suspected intervention by Japanese authorities.

The Nikkei average seesawed before finishing marginally lower at 38,236.07, extending losses for a second straight session.

The broader Topix index also settled on a flat note at 2,728.53, with marine transport, steel and glass sectors underperforming.

As per the Bank of Japan Minutes of the March meeting, many members shared the view that long term interest rates should basically be set by markets.

Seoul stocks snapped a three-day rise, with the Kospi average ending down 0.31 percent at 2,683.65 after the Fed said that no rate hike is on the table. Investors also digested official data showing that South Korea's inflation slowed more than expected in April.

South Korea's factory activity contracted again in April, but manufacturers' optimism climbed to the highest level in nearly two years, a private survey revealed.

Australian markets eked out modest gains, led by banks and miners. The benchmark S&P ASX 200 rose 0.23 percent to 7,587 ahead of the Reserve Bank of Australia's (RBA) monetary policy announcement, due on May 7. The broader All Ordinaries index settled up 0.22 percent at 7,849.40.

Lender National Australia Bank added 1.5 percent on share buyback news. Supermarket chain Woolworths slumped 4.2 percent after posting worse than expected financial results for the March quarter.

Across the Tasman, New Zealand's benchmark S&P/NZX 50 index finished marginally higher at 11,874.04, recovering from an early slide.

U.S. stocks fluctuated before closing slightly higher overnight after the Fed held rates steady and cited lack of progress on inflation to cut interest rates from a two-decade high.

The U.S. central bank also announced that it would shrink its balance sheet at a slower pace to ease strains in money markets.

On the data front, private payrolls increased at a faster than expected pace in April, while factory activity contracted in the month on declining demand, separate reports revealed.

While the Dow inched up 0.2 percent, the tech-heavy Nasdaq Composite and the S&P 500 both dipped around 0.3 percent.