Japan ,Tokyo City skyline, Tokyo Tower.
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Asia-Pacific stocks and currencies fell Thursday, amid a broader market sell-off after the U.S. Federal Reserve delivered its third consecutive rate reduction and signaled fewer rate cuts ahead.
Investors assessed the Bank of Japan’s decision to keep its policy rate unchanged at 0.25% for the third straight meeting.
The Japanese yen dipped 0.74% to 155.94 against the greenback, hitting a one-month low, as BOJ Governor Kazuo Ueda said the central bank will continue raising policy rates if the economy moves in line with its forecast.
In response to the central bank’s move, the Nikkei 225 lost 0.69% to end at 38,813.58, while Topix was down 0.22%, finishing at 2,713.83.
In South Korea, the Kospi index dropped 1.95% to close at 2,435.93 and the Kosdaq index declined 1.89% to 684.36. The South Korean won hovered near its weakest level since March 2009, and was last trading at 1,452.33 on the U.S. dollar.
Australia’s S&P/ASX 200 dropped 1.7% to close at 8,168.2.
Hong Kong’s Hang Seng index declined 0.88% while the mainland China’s CSI 300 index shed 0.62%.
The Hong Kong Monetary Authority on Thursday delivered a 25-basis-point interest rate cut in lock-steps with the Fed. The country’s currency is tightly pegged to the U.S. dollar.
Elsewhere, New Zealand’s economy sank into a recession, falling 1% in the September quarter from the prior quarter, according to the official statistics agency Stats NZ. A recession is defined as two consecutive quarters of decline.
Overnight in the U.S., the Dow Jones Industrial Average tanked by 1,123.03 points, or 2.58%, to 42,326.87, posting its first 10-day losing streak since 1974. The broad-based S&P 500 dropped 2.95% to 5,872.16 and the Nasdaq Composite lost 3.56% to 19,392.69.
The sell-off on Wall Street came after the central bank lowered its overnight borrowing rate by 25 basis points to a target range of 4.25% to 4.5%. While the cut was widely anticipated, the Fed indicated there will only be two rate cuts in 2025, fewer than the four cuts in its previous forecast.
“We moved pretty quickly to get to here, and I think going forward obviously we’re moving slower,” Fed Chair Jerome Powell said at the post-meeting press conference.
— CNBC’s Brian Evans, Lisa Kailai Han contributed to this report.
