Asia markets in red tracking Wall Street sell-off amid hawkish Fed stance; BOJ keeps rate on hold

Asia-Pacific markets trade in red on Thursday, tracking the fall sell-off on Wall Street overnight, as the Fed reduced interest rates by 25 bps but signaled a softer pace of rate cuts next year. Investors assessed the Bank of Japan’s decision to keep its policy rate unchanged at 0.25% for the third straight meeting . Meanwhile, caution mounted ahead of Friday's decision on key lending rates from the Chinese central bank. Japan ( NKY:IND ) fell -0.71% to below 38,700, while the broader Topix Index fell 0.5% to 2,706 on Thursday, reaching their lowest levels in three weeks. The Japanese yen fell past 155 per dollar on Thursday, reaching a one-month low, after the Bank of Japan left its policy rate unchanged at 0.25%, as widely expected . Investors are now focused on BOJ Governor Kazuo Ueda’s post-meeting press conference for insights into the timing of future rate hikes. China ( SHCOMP ) fell -0.49% to around 3,360 while the Shenzhen Component lost 0.5% to 10,528 on Thursday, reversing gains from the previous session amid a strong intervention from the People’s Bank of China. On Thursday, the central bank set the currency’s daily reference rate significantly stronger than market expectations, marking the widest gap since July. China Vanke Co. plunged by 4.5% after Bloomberg News said that the Chinese regulator had requested the country's largest insurers to disclose their financial exposure to the troubled builder. Hong Kong ( HSI ) fell -0.74% to 19,653 in the morning trade on Thursday, following a notable rise the previous day. The Hong Kong Monetary Authority slashed its base rate by 25bps to 4.75% on December 19th, after the US Federal Reserve trimmed interest rates by the same margin but projected fewer reductions next year. India ( SENSEX ) fell -1.18% to 79,321 in morning trade on Thursday, declining for the fourth session while hitting its lowest level in three weeks due to losses from banking, financial services, metals, and tech sectors. The Indian rupee weakened past 85 per USD, hitting a fresh all-time low, pressured by a strong dollar amid a hawkish outlook from the Federal Reserve. Australia ( AS51 ) fell -1.70% to close at 8,168 on Thursday, marking a six-week low. Consumer inflation expectations in Australia increased to 4.2% in December 2024 from 3.8% in the previous month, marking the highest level since September. However, the trimmed Mean CPI rose 3.5% y/y, surpassing the central bank's 2-3% target. In the U.S., on Wednesday, all three major indexes ended lower as the Federal Reserve reduced interest rates by 25 bps but signaled fewer cuts than previously projected for next year, sparking a market sell-off. U.S. stock futures stabilized on Thursday after a sharp selloff on Wall Street the previous day, triggered by the Federal Reserve's revised outlook for interest rates in 2025: Dow +0.10% ; S&P 500 -0.03% ; Nasdaq -0.17% . Bitcoin ( BTC-USD ) fell below the $100,000 mark on Thursday, retreating sharply from recent all-time highs following signals from the US Federal Reserve of fewer interest rate cuts in 2025. Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Bank of Japan keeps policy rate unchanged at 0.25%, as widely expected Japan's Nov export growth accelerates to three-month high, while imports unexpectedly fall China's Nov retail sales slows as stimulus impact fades; unemployment rate held steady Japan's factory activity shrinks for sixth straight month, services activity improves in December China's trade surplus largest in 5 months; exports slow while imports fall amid trade uncertainties