Asia-Pacific Stocks Mixed; Korean Shares Hover Near Record Highs as Approaching Fed Meeting Fuels Caution

TradingKey - On April 29, as the Federal Reserve's policy meeting approached, market sentiment remained cautious, and Asia-Pacific stock markets saw mixed performance. The Fed is holding its policy meeting in Washington this week, with the results to be announced on Wednesday at 2:00 PM ET, followed by a press conference by Fed Chair Jerome Powell 30 minutes later. Given that this will be Powell's final press conference, the market is closely watching the policy signals released to speculate on the Fed's future decision-making direction.

The Japanese stock market was closed for a holiday. Rating agency Fitch stated that inflation is now deeply rooted and increasingly driven by domestic factors, supporting Fitch's view that the Bank of Japan will continue to push for monetary policy normalization. Since 2022, headline consumer price inflation has averaged 2.9%, exceeding the BOJ's 2% target. The recent decline in headline inflation mainly reflects government energy measures rather than a weakening of underlying price pressures.

Fitch expects the Bank of Japan to continue raising interest rates, with the policy rate projected to rise by 75 basis points to 1.5% by 2026. Real policy rates remain deep in negative territory and are trending toward normalization as the BOJ further tightens policy, which in turn should exert some upward pressure on the yen.

South Korea's KOSPI index opened lower and fluctuated in the morning before gradually recovering in the afternoon and hovering at high levels. It closed the day up 0.75% at 6,690.9 points, an increase of 49.88 points from the previous day. The index hit an intraday high of 6,702.38 and a low of 6,596.03.

Among heavyweights, Hyundai Heavy Industries rose 2.85%, and Samsung Electronics gained 1.58%; SK Hynix fell 1.04%, and Samsung Biologics dropped 1.99%.

Han Ji-young, an analyst at Kiwoom Securities, pointed out that the South Korean stock market reached this new milestone as investors' sensitivity to the Middle East situation decreased, with hopes pinned on progress in peace talks between the U.S. and Iran, and rekindled optimism regarding major South Korean chipmakers. He added that a similar trend was observed among foreign investors—who had net sold a record 35 trillion won (approximately $23.8 billion) worth of South Korean stocks last month but have now returned to the market in force.

[Source: Google Finance]

The Taiwan Weighted Index was under pressure early in the session before rebounding amid volatility, eventually closing down 0.55% at 39,303.5 points. Among heavyweights, TSMC fell 1.58%, MediaTek dropped 1.53%, and ASE Technology Holding declined 1.41%. OpenAI's Q1 revenue and user growth both failed to meet expectations; while the company aimed for 1 billion weekly active users, the actual figure was approximately 900 million. Additionally, Sam Altman revealed in January that the API business added about $1 billion in ARR per month, but the company's overall monthly revenue has since missed targets several times. Growth momentum is facing headwinds, and the AI application layer is beginning to encounter bottlenecks in scaling up.

The Australian stock market remained under pressure throughout the day, with the S&P/ASX 200 index closing down 0.27% at 8,687 points.