Asian Markets Mixed as Fed Keeps Interest Rates Unchanged

Asian markets were mixed on Thursday after the Federal Reserve kept U.S. interest rates unchanged as expected.

The Nikkei Stock Average rose 1.1% to 22,488.74, while the Hang Seng Index retreated from recent record highs to end the day down 0.4%. The Shanghai Composite Index fell 0.5% to 3,633.40.

On Wednesday, the Fed left interest rates unchanged, as expected, and indicated that it plans to slowly reduce its $4.5 trillion balance sheet by shrinking $50 billion a month.

The Fed’s updated projection called for three interest rate hikes in 2019, matching the prior forecast and down from four when the Fed last met in May.

The Asian markets’ mixed performance Thursday followed the recent market rally that took U.S. markets to all-time highs on Wednesday.

Yesterday, Asian markets did receive some positive news from some key U.S. economic indicators.

In a CNBC report, Boston Federal Reserve Bank President Eric Rosengren said Wednesday that the economy has shown growing momentum in recent months and that he expects the United States to deliver “strong” earnings growth in the second half of the year.

Fed.com also reported that the Institute for Supply Management’s (ISM) manufacturing index rose to 59.8 from 58.9 in May, surpassing estimates of 57.5.

It also reported that the ISM’s services index increased to 61.1, the highest reading in over four years.

That growth should have some positive implications for Asian markets, which tend to be more closely linked to the American economy.

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