SEOUL, South Korea (AP) – Asian stocks were mixed on Wednesday ahead of the Federal Reserve’s policy statement, as strong U.S. economic data raised questions over the likely course for interest rates.
KEEPING SCORE: Japan’s Nikkei 225 rose 1.7 percent to 16,664.82 and Australia’s S&P/ASX200 was down less than 0.1 percent at 5,537.20. Hong Kong’s Hang Seng index gave up early gains, falling 0.2 percent to 22,085.99 and South Korea’s Kospi fell 0.1 percent to 2,025.05. Stocks in mainland China also fell but shares in Taiwan, Singapore and Indonesia were stronger.
U.S. RECOVERY: U.S. new home sales data in June exceeded expectations. Americans bought new homes last month at the fastest pace in more than eight years, according to the Commerce Department. Home prices continued their steady upward march in May, thanks to rising sales and a dwindling supply of available houses. Analysts said data continued to auger a broad recovery.
FED WATCH: The Federal Open Market Committee is scheduled to release its latest monetary policy statement later on Wednesday after wrapping up a two-day meeting. While analysts expect the Federal Reserve not to change policy this month, they said recent strength in U.S. economic data and the recovery of investor sentiment since Britain’s referendum to leave the European Union have revived the possibility of a rate hike later this year.
ANALYST’S TAKE: “The Fed will in most likelihood opt for a cautious stance while assessing Brexit implications on the U.S. economy,” Mizuho Bank wrote in a daily commentary. “We caution that there is a risk that markets may be caught wrong-footed in the event of a surprise downbeat tone.”