HONG KONG (AP) – Asian shares slipped Thursday after the latest Fed minutes raised the possibility that a U.S. rate hike could come sooner than expected.
KEEPING SCORE: Japan’s benchmark Nikkei 225 lost 0.3 percent to 19,315.11 and South Korea’s Kospi was flat at 2,106.22. Hong Kong’s Hang Seng shed 0.3 percent to 24,117.18 and the Shanghai Composite index in mainland China retreated 0.2 percent to 3,255.95. Australia’s S&P/ASX 200 declined 0.4 percent to 5,784.70.
RATE HORIZON: At their meeting last month, Federal Reserve officials discussed the need to raise a key interest rate again “fairly soon,” especially if the world’s No. 1 economy maintains its strength, according to the minutes. Most economists had been expecting a rate hike no earlier than June, but the discussion raises the possibility it could come as soon as March. Investors were waiting for policymakers to follow up their talk with concrete action, but that also hinges on more details from President Donald Trump’s administration on his economy-boosting plans. Ultralow interest rates have fueled a multiyear global stock rally and the prospect of higher U.S. interest rates has lifted the dollar and made the U.S. still more attractive than other markets for investors.
TRADER TALK: The minutes “revealed a consensus among Fed members to raise rates, but the minutes offered up little more than studiously ambiguous double talk by suggesting a rate hike would be delivered ‘fairly soon’,” said Stephen Innes, senior trader at OANDA. “Short-term dollar speculators were hoping the Feds would produce a more meaningful time frame” while Fed chief Janet Yellen was “awaiting clarity regarding the yet-to-be implemented Trump policies,” he said.
SHIFTING GEARS: Nissan Motor Co. said its CEO Carlos Ghosn will be replaced by veteran executive Hiroto Saikawa but Ghosn Ghosn will remain chairman at the Japanese automaker as well as at its alliance partners Renault SA and Mitsubishi Motors Corp. A succession has been in the works for years for Ghosn, who led efforts to turn a near-bankrupt Nissan around after he arrived at the company in 1999. Nissan shares lost 0.8 percent.