Asian Markets Mixed, as US Data miss lowers chances of Fed Hike

Asian shares opened mixed on Wednesday, shrugging off Wall Street's higher close on "bad news is good news" as weaker-than-expected US ISM services data lowered the chances the Federal Reserve will hike rates. Japan's Nikkei 225 fell 0.76 percent in early Asian trade, as the yen strengthened against the dollar. 

 

A stronger yen is generally seen as negative for Japanese stocks as it makes exports more expensive and reduces overseas earnings when translated back into the home currency. The dollar/yen pair fell to 101.33 at 9:35 a.m. HK/SIN time, below the 103 levels it had held for the past three trading sessions. 

 

That move came as the dollar weakened amid lower prospects for the Fed to hike interest rates at its September meeting. "Without the Fed around to support the heavy lifting in September, that is to raise rates, the market is less than convinced that any standard Bank of Japan policy will be effective at this stage. Look for probes lower" for the dollar/yen pair, wrote Stephen Innes, senior trader at OANDA, in a note.

 

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