Asian Stock Market Opens Positive in Response to US Federal Reserve’s Interest Rate Cut

Asian stock markets opened on a positive note today (19 September 2024) after investors evaluated the meeting results of the US Federal Reserve (Fed). The Fed Committee decided to cut interest rates by 0.50% at its meeting yesterday (September 18).

The Nikkei Index of the Tokyo Stock Exchange opened at 36,958.93 points, an increase of 578.76 points or 1.59%. The Hang Seng Index of the Hong Kong Stock Exchange opened at 17,633.93 points, a decrease of 26.09 points or 0.14%. Meanwhile, the Composite Stock Market Index of Shanghai, China, opened at 2,723.21 points, an increase of 5.93 points or 0.22%.

The KOSPI index of the South Korean stock market opened 0.57% higher, while the S&P/ASX 200 index of the Australian stock market opened 0.15% higher.

The Fed Board decided to reduce short-term interest rates by 0.50% to 4.75-5.00% at yesterday’s meeting. This is the first interest rate cut in more than 4 years or since 2020. In terms of the policy interest rate forecast or Dot Plot, Fed officials signaled a further 0.50% interest rate cut by the end of this year.

Investors are keeping a close eye on Malaysia’s August trade data release and Australia’s unemployment rate, both of which are scheduled to be released today.

A two-day monetary policy meeting of the Bank of Japan (BOJ) will conclude tomorrow (September 20), where the BOJ committee will decide on interest rates. This meeting is significant, as the BOJ recently ended its policy of low interest rates that had been in place for decades.