Asian investors found support in the technology sector on Wednesday, allowing regional markets to finish higher despite lingering concerns over tightening U.S. monetary policy. Federal Reserve comments remained cautious, but the rise in chipmakers and tech stocks offered a temporary respite to market nerves.
Federal Reserve governor Michelle Bowman highlighted potential upward risks to inflation, stating that interest rates are likely to remain high “for some time.” These remarks arrive as traders await the release of pivotal U.S. inflation data expected this week, which could guide market movements. Lisa Cook emphasized that future rate decisions will hinge on the trajectory of economic data in the coming months.
The U.S. dollar held steady near the 160-yen level as investors speculated the Bank of Japan could raise interest rates and reduce its bond-buying program in July. The dollar's strength weighed on gold prices, while oil rose despite unexpected gains in U.S. crude reserves. Market momentum was fueled by a strong performance in key tech firms. Advantest, a major supplier to Nvidia, surged 7 percent, while Tokyo Electron gained 3.6 percent and Screen Holdings rose 2.1 percent.
China’s Shanghai Composite index inched up 0.76 percent to 2,972.53, having recovered from an early decline. Hong Kong’s Hang Seng index ended slightly higher at 18,089.93. However, Australia’s S&P/ASX 200 index dropped 0.71 percent to 7,783 due to increased inflation concerns, which may prompt an RBA interest rate hike in August.
New Zealand delivered a strong performance, with its S&P/NZX-50 index rising 1.01 percent to 11,835.02. In the U.S., markets closed mixed, with the Nasdaq Composite gaining 1.3 percent to end a three-day losing streak. The broader market saw the S&P 500 rise 0.4 percent, while the Dow declined 0.8 percent.
U.S. housing prices increased less than anticipated in April after showing little movement the previous month. The Chicago Federal Reserve’s economic index reported an uptick in inflationary pressure for the first time in three months, suggesting underlying concerns remain.