Asian markets show mixed response to Federal Reserve's interest rate plans

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Asian markets show mixed response to Federal Reserve's interest rate plans

Asian markets experienced a day of fluctuations on Wednesday, as investors grappled with the Federal Reserve's interest rate plans. This uncertainty comes in the wake of the central bank indicating no further tightening last week. Officials, including Austan Goolsbee, are waiting for clearer signs of a downward inflation trend and a softer labour market before committing to a stance.

The recent job creation data suggested a slowing pace but did not raise significant concerns about the economy. This has fostered confidence that the Federal Reserve could prevent a recession by ensuring a soft landing for the economy. Goolsbee underscored the importance of controlling inflation without causing economic harm.

Asian markets displayed a mixed performance. Tokyo, Hong Kong, Shanghai, Sydney, and Taipei witnessed gains, while Singapore, Seoul, Wellington, Manila and Jakarta posted losses. Despite this varied performance, analysts like Solita Marcelli maintain optimism about the equities' outlook. Marcelli attributes the recent stock upsurge to overdone investor pessimism.

A key factor in the fight against inflation could be the continued weakness in oil prices - a significant driver of last year's surge. Both main contracts fell over four percent on Tuesday following warnings about dropping demand next year. A US government report predicted per capita demand hitting a 20-year low. Tapas Strickland noted an improved supply in the physical market despite this low demand.

Key market figures showed Tokyo's Nikkei 225 , Hong Kong's Hang Seng Index , Shanghai Composite , and dollar/yen up; while Euro/dollar, Pound/dollar, and London's FTSE 100 were down. West Texas Intermediate remained flat; Brent North Sea crude was up slightly; New York's Dow also saw a minor increase.

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