Asian shares rise as US Fed leaves rate unchanged

Tokyo: Asian shares mostly rose Thursday after the US Federal Reserve opted not to cut interest rates for the first time since it began trying to help the economy through easier rates in September. Some Asia-Pacific markets remained closed for the Lunar New Year holiday. Investors remain uncertain over the outlook for the US economy and over what’s ahead from the administration of President Donald Trump.

Japan’s benchmark Nikkei 225 rose 0.2 per cent to 39,499.10 in afternoon trading. Australia’s S&P/ASX 200 gained 0.6 per cent to 8,493.70. SoftBank Group’s stock dipped 1.2 per cent after reports it was in talks to possibly invest in OpenAI, while Nissan Motor’s shares gained 1.3 per cent after the Japanese automaker confirmed plans to reduce production in the US On Wednesday, the S&P 500 fell 0.5 per cent to 6,039.31 following the Fed’s widely expected decision.

The Dow Jones Industrial Average dipped 0.3 per cent to 44,713.52, and the Nasdaq composite fell 0.5 per cent to 19,632.32. The Fed’s decision could hint at rates staying on hold for a while following their swift drop at the end of 2024. Lower rates would help the economy by making it cheaper for US households and companies to borrow, but the downside is they could also fuel more inflation. The yield on the 10-year Treasury held at 4.53 per cent, where it was late Tuesday. Fed Chair Jerome Powell said the US central bank could cut rates if inflation slows further or if the job market suddenly weakens.

But “right now, we don’t see that, and we see things as in a really good place for policy and for the economy, and so we feel like we don’t need to be in a hurry to make any adjustments.” While Wall Street would almost always prefer lower interest rates, “we would continue to focus on why the Fed won’t cut anytime soon, specifically a strong economy and labor, which bodes well for solid corporate earnings growth,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

Wednesday’s relative calm offered some respite following two days of disruption driven by doubts about the artificial-intelligence boom. A Chinese upstart, DeepSeek, has raised nearly existential questions for some of the AI industry after saying it developed a large-language model that can compete with the world’s best without having to use top-flight chips.