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Asia-Pacific Markets Mixed Ahead of Fed's Jackson Hole Summit

KAZUHIRO NOGI | AFP via Getty Images
  • Asia-Pacific markets traded mixed on Friday where Chinese mainland shares rose.
  • The highly anticipated Jackson Hole symposium from the Fed will be held virtually on Friday.
  • Investors are expecting to hear what Powell thinks about the state of the U.S. economy and how he might guide the central bank's exit from the measures it took to rescue the economy from the Covid-19 pandemic.

SINGAPORE — Asia-Pacific markets traded mixed on Friday as investors remained cautious ahead of the Federal Reserve's annual Jackson Hole symposium where Fed Chair Jerome Powell is due to speak.

In Australia, the benchmark ASX 200 closed fractionally lower at 7,488.30. The heavily weighted financials subindex rose 0.25% while the energy sector was flat and materials fell 0.45%.

The Nikkei 225 in Japan fell 0.36% to 27,641.14 while the Topix index declined 0.34% to 1,928.77. South Korea's Kospi rose 0.17% to 3,133.90 and the Hang Seng Index in Hong Kong was down 0.18% in late afternoon trade.

Chinese mainland shares also rose: The Shanghai composite advanced 0.59% to 3,522.16 while the Shenzhen component added 0.15% to 14,436.90.

Major indexes in India also rose in afternoon trade while those in Singapore and Indonesia struggled.

Jackson Hole in focus

The highly anticipated Jackson Hole symposium from the Fed will be held virtually on Friday. Investors are expecting to hear what Powell thinks about the state of the U.S. economy and how he might guide the central bank's exit from the measures it took to rescue the economy from the Covid-19 pandemic.

"Fed chairs have a track record of foreshadowing major policy announcements at Jackson Hole, and some investors think Powell will provide further clues around the timing of a tapering announcement, which could come as soon as the FOMC meeting next month," Tapas Strickland, director of economics and markets at the National Australia Bank, wrote in a Friday morning note.

Strickland pointed out that an announcement on tapering is "highly likely" to come before the end of the year.

Elsewhere, India's central bank governor told CNBC that the Reserve Bank of India will not surprise markets with a sudden rate hike. The RBI's repo rate — the rate at which it lends to commercial banks — is at a record low of 4%.

In overnight trade, the three major U.S. indexes finished lower during Thursday's regular trading session. The Dow snapped a four-day win streak while the S&P 500 and the Nasdaq Composite both broke five-day win streaks.

Currencies and oil

In the currency market, the U.S. dollar last traded at 92.972 against a basket of its peers. The greenback retreated from an earlier level around 93.131 but remained in a relatively tight range.

Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, said in a Friday note that market participants are most interested in what Fed Chair Powell will say about monetary policy in his speech.

"If Powell does hint at tapering as soon as the September policy meeting, expect the USD to jump because that is earlier than US analysts expect," Capurso wrote.

The Japanese yen traded at 110.07 against the dollar, weakening from an earlier level around 109.87. Meanwhile, the Australian dollar changed hands at $0.7252, up around 0.25%.

Oil prices rose Friday during Asian trading hours, where U.S. crude added 1.82% to $68.65 while global benchmark Brent rose 1.66% to $72.25. Prices fell overnight as new Covid outbreaks raised concerns about the recovery in global demand for oil.

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