(Sharecast News) - Asia-Pacific equities gave up early gains and traded mostly lower on Thursday after the US Federal Reserve delivered its third rate cut of the year and signalled a pause in further easing.
The Fed reduced the federal funds rate by 25 basis points to a range of 3.5% to 3.75% and said it was now "well-positioned to wait and see how the economy evolves."
Chair Jerome Powell noted that president Donald Trump's tariffs had fuelled inflation and confirmed the central bank would begin buying $40bn in Treasury bills from Friday.
Short-term Treasury yields fell following the announcement, while the Fed also removed language suggesting the labour market "remained low," signalling a shift toward supporting growth.
Patrick Munnelly, market strategy partner at TickMill, said that "bonds surged, and stocks advanced as the Federal Reserve implemented its third consecutive interest rate cut, with chair Jerome Powell expressing confidence in economic recovery, provided the inflationary effects of tariffs prove temporary."
He added that the FOMC decision came as no surprise, though "the SEP projections and press conference provided much to analyse," with policymakers navigating mixed signals on inflation and labour-market strength.
Asian markets in the red across the region
Japan's Nikkei 225 fell 0.9% to 50,148.82, dragged lower by a sharp sell-off in SoftBank Group, which slumped 7.69% after Oracle's weaker-than-expected quarterly results renewed concerns about the profitability timeline for large-scale AI infrastructure investments.
Sumitomo Pharma dropped 6.21% and Mitsubishi Heavy Industries slid 4.59%.
The Topix declined 0.94% to 3,357.24.
Munnelly noted that "the global market rally driven by the Fed's rate cut lost momentum after disappointing earnings from Oracle weighed on tech stocks, shifting focus to the central bank's outlook for further easing in the coming year."
He also highlighted that the report triggered a regional pullback in technology names, with "a selloff in Asian technology stocks" erasing earlier gains.
Mainland Chinese equities also weakened.
The Shanghai Composite fell 0.7% to 3,873.32, led by steep losses in Ningxia Xinri Hengli Steel Wire Rope Co, down 26.24%, and double-digit declines in Fujian Tianma Science and Technology Group and Shanghai Tongji Science & Technology Industrial.
The Shenzhen Component slid 1.27% to 13,147.39, with ZTE Corporation dropping about 10% after Reuters reported the company may need to pay more than $1bn to the US government to settle foreign-bribery allegations.
Hong Kong's Hang Seng Index was little changed, slipping 0.04% to 25,530.51.
Losses in Alibaba Health Information Technology, down 3.95%, Lenovo Group, down 2.67%, and Sands China, down 2.31%, capped the market's performance.
South Korea's Kospi fell 0.59% to 4,110.62, marking a third straight day of losses, while the Kosdaq ended a three-day winning streak.
Aprogen KIC plunged 9.78%, Y2 Solution dropped 8.97% and Kolon Mobility Group lost 6.4%.
Sydney, Wellington bourses buck regional downtrend
Australasian markets bucked the regional trend, with Australia's S&P/ASX 200 rising 0.15% to 8,592.00.
James Hardie Industries gained 7.13% after a leadership reshuffle in its North America division.
Ramelius Resources climbed 6.72% as the gold miner announced an AUD 250m share buyback and lifted its minimum dividend.
Flight Centre rose 5.37% after unveiling a 127m acquisition of UK cruise specialist Iglu and upgrading its 2026 profit guidance.
Investors also weighed Australia's latest labour-market report, which showed unemployment steady at 4.3% and a surprise 21,000 decline in total jobs, adding uncertainty to the Reserve Bank's policy outlook.
Munnelly noted that policymakers worldwide were taking a cautious stance, echoing views from North America, where "the Bank of Canada kept rates steady at 2.25% ... adopting a slightly more dovish tone" and highlighting sector vulnerabilities despite recent job-market improvements.
Across the Tasman Sea, New Zealand's S&P/NZX 50 edged up 0.19% to 13,395.87, supported by gains in Summerset Group Holdings, up 3.21%, Serko, up 2.86%, and Ryman Healthcare, up 2.49%.
Dollar mixed on regional currencies, oil prices slip
In currencies, the dollar slipped 0.14% on the yen to trade at JPY 155.80, while it rose 0.27% against the Aussie to AUD 1.5019 and advanced 0.07% on the Kiwi to NZD 1.7206.
Oil prices weakened, with Brent crude futures last down 1.43% on ICE at $61.32 per barrel, and the NYMEX quote for West Texas Intermediate declining 1.47% to $57.60.
Reporting by Josh White for Sharecast.com.
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