(Sharecast News) - Asia-Pacific markets closed mixed on Thursday after the Federal Reserve indicated that a rate hike could still come this year, tempering sentiment following its first meeting under new chairman Kevin Warsh.
"Lower oil is doing the heavy lifting - boosting equities and dampening the immediate inflationary impulse," said Patrick Munnelly, market strategy partner at TickMill.
"But Warsh's first FOMC meeting left traders uncertain, and a hawkish shift in the dots has effectively ruled out imminent easing."
The Fed kept the benchmark federal funds rate unchanged in a range of 3.5% to 3.75% on Wednesday, but policymakers' updated "dot plot" showed several officials now expect rates to rise in 2026.
The median year-end rate projection increased to 3.8% from 3.4% in March, suggesting at least one rate hike could be in prospect.
The outlook was complicated by Warsh's decision to abstain from submitting a rate forecast.
"The Fed meeting is the key macro anchor," Munnelly said.
"The FOMC left the target range unchanged at 3.50-3.75%, but markets interpreted the outcome as hawkish."
Munnelly said the removal of the easing bias from the statement would have been more clearly hawkish under former chair Jerome Powell, but under Warsh it also reflected a broader shift toward a shorter statement and less explicit guidance.
"This was not simply a case of keeping the old framework and deleting dovish language; it looked more like a structural decision to remove guidance almost altogether," he said.
"Warsh appears to be moving the Fed toward a "less is more" communications regime, where markets are given fewer explicit signposts and forced to price the reaction function themselves."
Oil prices fell, with Brent crude futures last down 2.05% on ICE at $77.92 per barrel, and the NYMEX quote for West Texas Intermediate losing 2.77% to $74.66.
"Risk appetite has returned after president Trump signed an interim agreement aimed at resolving the Iran conflict and reopening the Strait of Hormuz," Munnelly said.
"After Wednesday's Fed-driven dip, investors are again leaning into the idea that a reopening of Hormuz can lower inflation pressure, support consumption and reduce the threat of a more damaging energy shock."
Markets mixed, SK Hynix surges on memory chip news
Japan's Nikkei 225 rose 1.65% to 71,053.49, while the broader Topix gained 1.37% to 4,068.18.
Ajinomoto climbed 8.37%, Murata Manufacturing rose 8.1%, and Screen Holdings added 7.21%.
In China, the Shanghai Composite fell 0.43% to 4,090.48, while the Shenzhen Component rose 0.94% to 16,030.70.
Whirlpool China dropped 14.72%, Cybrid Technologies lost 10.03%, and Grand Sunergy Tech declined 9.98%.
Hong Kong's Hang Seng Index fell 1.59% to 23,924.81.
China Overseas dropped 8.99%, China Resources Land lost 7.34%, and Longfor Properties declined 6.77%.
South Korea's Kospi 100 advanced 3.15% to 11,443.12.
Samsung Electro-Mechanics rose 8.27%, SK Square gained 6.52%, and SK Hynix added 6.51%.
SK Hynix reached a fresh record high after announcing that it had supplied samples of its 12-layer HBM4E memory chip to key customers.
The company said the next-generation product delivers data transfer speeds of up to 16 gigabits per second per pin and improves power efficiency by more than 20% compared with previous models.
SK Hynix is a key high-bandwidth memory supplier to Nvidia.
Munnelly said Asian equities had risen for a fifth consecutive session, with regional technology stocks again leading the move, even as investors digested the Fed's hawkish rate projections.
"That tells us the immediate relief from lower oil and reduced geopolitical tail risk is still powerful enough to offset tighter rate expectations, at least in equities," he said.
Sydney in the red, Wellington falls on lower-than-expected GDP growth
Australia's S&P/ASX 200 fell 0.62% to 8,911.10.
Meridian Energy declined 5.65%, Paladin Energy lost 5.26%, and Generation Development Group dropped 5.07%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 slipped 0.22% to 13,363.31.
Eroad fell 3.77%, SkyCity Entertainment Group lost 3.74%, and Mainfreight declined 2.78%.
New Zealand's economy grew 0.8% in the March quarter, after a 0.5% expansion in the previous quarter, but missed the Reserve Bank of New Zealand's 1.0% forecast.
Annual GDP rose 1.5%, ahead of market expectations for 1.1% growth.
The figures pointed to a strengthening recovery but largely reflected conditions before the escalation of the Middle East conflict, which is expected to have weighed on activity.
Forecasts now suggest GDP could barely grow or contract in the second quarter.
Traders are pricing in a 70% chance of a 25-basis-point RBNZ rate hike in July, although swaps now imply two increases this year rather than the three previously expected.
Dollar gains on regional peers
In currencies, the dollar was last up 0.11% on the yen to trade at JPY 160.82, as it gained 0.02% against the Aussie to AUD 1.4260, and advanced 0.08% on the Kiwi to NZD 1.7349.
Reporting by Josh White for Sharecast.com.
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