Asian markets displayed a sharply divided performance on Thursday as investors digested the US Federal Reserve's latest interest rate decision. While South Korea's benchmark index celebrated a historic achievement, Japanese stocks faced significant downward pressure.
Kospi's Spectacular Rally
South Korea's Kospi index shattered previous records, climbing 1.3% to reach an unprecedented peak of 2,753. This remarkable surge represents the index's strongest performance in nearly two years, demonstrating robust investor confidence in the Korean market.
Japan's Market Struggles
Across the sea, Japan's Nikkei 225 told a different story, declining by 0.8% to settle at 38,720. The broader Topix index also retreated, dropping 0.5% to 2,627. This divergence highlights the varying impact of global monetary policies on different Asian economies.
Federal Reserve's Influence
The market movements come directly after the US Federal Reserve maintained its current interest rate levels while signaling only one potential rate cut for 2024. This more hawkish-than-expected stance has created ripples across global financial markets, with Asian investors carefully reassessing their positions.
Broader Asian Market Picture
Other major Asian markets showed mixed reactions:
- Australia's S&P/ASX 200 edged slightly higher
- Hong Kong's Hang Seng index faced moderate declines
- Mainland Chinese markets remained closed for a holiday
Currency Market Reactions
The financial turbulence extended to currency markets, where the South Korean won appreciated against the US dollar, trading at 1,375.5. Meanwhile, the Japanese yen weakened slightly, moving to 157.93 against the greenback.
Market analysts suggest that the divergent performances between South Korean and Japanese stocks reflect differing economic fundamentals and varying sensitivity to US monetary policy changes. While Korean tech and export stocks benefited from the Fed's stance, Japanese equities faced profit-taking after recent gains.
