Asian Stocks Mostly Higher Ahead of Fed’s Rate Decision

SEOUL, South Korea (AP) -
FILE - In this Dec. 1, 2016, file photo, a monitor shows the chart of the current exchange rate between Japanese yen and U.S. dollar at a foreign exchange brokerage in Tokyo. Large Japanese manufacturers have gained confidence as the yen has weakened against the U.S. dollar since Donald Trump was elected U.S. president, a quarterly survey by the Bank of Japan showed Wednesday, Dec. 14, 2016. (AP Photo/Shuji Kajiyama, File)
A monitor shows the chart of the current exchange rate between Japanese yen and U.S. dollar at a foreign exchange brokerage in Tokyo. (AP Photo/Shuji Kajiyama, File)

Asian stock markets were mostly higher on Wednesday ahead of the Federal Reserve’s decision on interest rates. The Fed was widely expected to announce later in the day an increase in the key policy rate for the first time in a year.

Japan’s Nikkei 225 finished nearly unchanged at 19,253.61 and South Korea’s Kospi gained less than 0.1 percent to close at 2,036.87. Hong Kong’s Hang Seng index rose 0.4 percent to 22,538.77 but the Shanghai Composite Index fell 0.2 percent to 3,147.54. Australia’s S&P/ASX 200 rose 0.7 percent to 5,584.60. Stocks in Southeast Asia were mixed.

Market investors expect the Federal Reserve to announce a rate hike, the first since December 2015, at the end of the two-day Federal Open Market Committee meeting on Wednesday. Investors will listen for clues about future policy and the economic outlook under President-elect Donald Trump from Fed Chair Janet Yellen’s press conference. The central bank has kept rates low since the 2008 financial crisis.

“Against a backdrop of solid US economic data, an improving jobs market and changes that Trump Administration could potentially bring to the capital market, expectation for a 25 basis points rate hike by the Federal Reserve hit 100 percent several weeks ago,” said Margaret Yang of CMC Markets.

U.S. stocks finished higher on Tuesday. The Dow Jones industrial average climbed 114.78 points, or 0.6 percent, to 19,911.21. The Standard & Poor’s 500 index picked up 14.76 points, or 0.7 percent, to 2,271.72. The Nasdaq composite climbed 51.29 points, or 0.9 percent, to 5,463.83.

The Bank of Japan’s quarterly “tankan” survey of more than 10,000 companies found improved confidence among big Japanese manufacturers as the yen has weakened against the U.S. dollar since Trump was elected U.S. president. The report comes a day before the Bank of Japan is due to hold its last meeting of the year, where it is expected to leave policy unchanged given hints of improved conditions in the economy.

Benchmark U.S. crude fell 59 cents at $52.39 per barrel in New York. The contract rose 15 cents to close at $52.98 on Tuesday. Brent crude, the international standard, lost 54 cents to $55.18 a barrel in London.

The dollar rose to 115.13 yen from 115.06 yen. The euro strengthened to $1.0650 from $1.0635.