Asian markets largely followed Wall Street’s positive trend after reassuring comments from US Federal Reserve Chairman Jerome Powell. Despite slashing growth forecasts and raising inflation expectations, Powell indicated any price increases from tariffs would be temporary, helping to stabilize markets.
Most Asian markets, including Sydney, Seoul, Singapore, and others, posted gains. Jakarta’s index, while still under pressure, extended its positive momentum from the previous day. However, Hong Kong and Shanghai indices saw declines after earlier strong performances.
The US Federal Reserve’s decision to maintain interest rates stable for the second consecutive time this year and its indication to potentially introduce rate cuts further supported market optimism. This was bolstered by a reduction in the Fed’s balance sheet normalization pace, easing previous monetary policy tightening.
In currency markets, the yen strengthened, while the dollar softened against the pound and euro. Safe-haven asset gold saw new record highs due to ongoing geopolitical uncertainties, particularly Middle East tensions and developments in Eastern Europe.
Oil prices also rose on heightened Middle Eastern hostilities, with Israel launching significant strikes on Gaza. Meanwhile, diplomatic exchanges between the US and Ukraine hint at shifting dynamics in Eastern European tensions.
Overall, while the outlook remains uncertain, Powell’s comments have provided temporary relief to market nerves amid ongoing global economic and geopolitical challenges.
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