The Opera House screen is lit up with projections on the opening night of Vivid Sydney 2023 in Sydney, Australia, Friday, May 26, 2023.
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Asia-Pacific markets rose on Thursday after the US Federal Reserve held the Federal Funds rate at 5.25% to 5.5%, and moved the “plot point” to project only one rate cut this year.
This is down from the three cuts outlined in the March meeting. However, the dot plot also shows a more aggressive path of cuts for 2025 – four rate cuts totaling a full percentage point are anticipated, up from three.
In Asia-Pacific, South Korea Kospi led the gains, popping 1.39% and on pace for the third day of gains, while the small cap Kosdaq rose 0.6%.
Japan Nikkei 225 gained 0.56%, while the Topix based on this angle is marginally lower.
Australia’s S&P/ASX 200 rose 0.8%, recovering from two days of losses.
Hong Kong Hang Seng Index futures were at 18,035, higher than the previous close of 17,937.84.
The Fed’s post-meeting statement said “inflation has moderated over the past year but remains elevated,” said the language of the final statement.
However, the new statement also said, “In recent months, there has been little progress towards the Committee’s 2 percent inflation target.”
The previous language said there had been “lack of progress” on inflation.
Separately, inflation in May remained unchanged from April, rising 3.3% year-on-year and remaining flat on a monthly basis.
Overnight in the US, all three major indexes rose in response to the Fed’s decision and the May inflation reading.
The S&P 500 jumped to a record high and closed above 5,400 for the first time.
The broader market index rose 0.85%, closing at 5,421.03, while the Nasdaq Composite also gained 1.53% and hit a record high. In contrast, the Dow Jones Industrial Average fell 0.09%.
— CNBC’s Lisa Kailai Han, Pia Singh and Jeff Cox contributed to this report.