Asian stock markets climbed on Thursday, fueled by a mix of optimism and a steady U.S. dollar. Much of the region was quiet due to the Lunar New Year holidays, but traders remained active, considering the Federal Reserve’s recent decision to pause rate cuts.
In a widely anticipated move, the Federal Reserve kept interest rates unchanged. Fed Chair Jerome Powell emphasized that there is no rush to lower rates again. His comments came amid concerns about potential new tariffs announced by President Donald Trump, which could impact Canada, Mexico, and possibly China this Saturday.
The yen saw a surprising boost against other currencies. The Bank of Japan is expected to continue its trend of raising interest rates, unlike many other central banks that are cutting them. This positive shift in the yen put pressure on Japanese stocks, but the Nikkei managed to close with minor gains.
Australia’s stock market stood out, hitting a record high. Traders cheered as the benchmark index reached new heights, showcasing the resilience of the Australian economy. Meanwhile, Wall Street experienced mixed results. After-hours earnings reports from tech giants provided little clarity on the ongoing debate about the rise of Chinese artificial intelligence startup DeepSeek, which has raised concerns over U.S. dominance in the sector.
Despite initial weaknesses, U.S. stock indexes ended the day 0.3% higher. Most major markets in Asia remained closed for holidays, including Hong Kong and mainland China, leaving room for limited trading activity.
The U.S. dollar maintained its position, sitting at 107.92 on the dollar index. The euro dipped slightly to $1.0414 as traders awaited the European Central Bank’s upcoming policy decision. A quarter-point rate cut is expected, with market participants speculating about additional cuts later this year.
Meanwhile, sterling remained steady at $1.2440. The yen appreciated about 0.5% to 154.43 per dollar, following comments from Bank of Japan Deputy Governor Ryozo Himino, who stated that rate hikes would continue if economic conditions align with forecasts. Traders are currently anticipating one more quarter-point increase this year, possibly in July.
In the oil market, prices edged higher after U.S. crude hit its lowest levels of the year. The focus remains on the potential tariffs on Canada and Mexico, both significant suppliers of crude to the United States.
