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Dec. 11, 2019, 11:31 p.m. EST

Most Asian markets higher after Fed signals it will hold the line on interest rates

China markets churn as traders look for fresh indications on tariff deadline

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By Rachel Koning Beals


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The Federal Reserve announced that interest rates will likely remain unchanged over the coming year.

Gains in Japan and Hong Kong led an otherwise mixed early Asian stock session Thursday after the Federal Reserve signaled it will likely keep U.S. interest rates on hold throughout 2020 amid a solid economy.

U.S. stocks gained slightly, the 10-year Treasury yield fell below 1.8% and the dollar /zigman2/quotes/210598269/delayed DXY +0.05%   held losses in response to the Fed’s update.

“The Fed offered up a surprising holiday season dovish delight for the market,” said Stephen Innes, chief Asia market strategist with AXI Trader.

Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +0.70%   rose 0.2%, while Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +1.27%   was up 1.1%. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.28%  slipped 0.2%, while the Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 +0.72%   also eased slightly.

South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.23%   rose 1.2%, while benchmark indexes in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 +0.24%  and Singapore /zigman2/quotes/210597985/delayed SG:STI +0.21% were little moved. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.94%   eased 0.7%.

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.06%  closed up 0.1%, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.23%  closed 0.2% higher and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.47%  rose 0.4%. All three U.S. benchmarks ended Tuesday within 1% or less of their record closes set nearly two weeks ago on Nov. 27, according to Dow Jones Market Data.

The Fed announced it was holding interest rates steady as was widely expected, but added that it expected to make no changes in either direction throughout 2020. It has said trade conflicts bear watching.

Bullish global stock investors are hoping for a delay to the Dec. 15 deadline for new tariffs on some $160 billion of consumer goods shipped from China to the U.S., which could be seen as a sign of progress for bigger-picture trade talks. U.S. President Donald Trump is expected to meet with top trade advisers on Thursday to discuss those planned tariffs, three sources familiar with the plans told Reuters .

So far, reports from the administration have been conflicting. White House advisers Larry Kudlow and Peter Navarro have both indicated that tariffs scheduled to hit Chinese goods on Dec. 15 are “still on the table,” following a report from the Wall Street Journal in which talk participants that said both parties were bracing for a delay of a tariff increases on China goods on Sunday.

See: The runway until more China tariffs kick in is getting short. Expect a bumpy ride

“President Trump is impossible to predict. So, unless you have some idea of the content of the Trump Twitter feed in advance, I suspect most traders will likely err on the side of caution and remain sidelined,” said Innes. “But looking at the current price action in [the S&P 500] and [the Chinese yuan], you don’t get the impression that investors even remotely think the U.S. will impose December tariffs which could derail a trade deal.”

Also keeping the market’s attention, a meeting of the European Central Bank on Thursday is expected to produce no surprises. The U.K. holds a general election Thursday.

Benchmark crude oil   gained 14 cents to $58.90 per barrel in electronic trading on the New York Mercantile Exchange.

The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0610%   eased to 108.53 Japanese yen from 108.73 yen Wednesday.

The Associated Press contributed .

/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
97.58
+0.05 +0.05%
Volume: 0.00
Jan. 22, 2020 11:58a
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/zigman2/quotes/210597971/delayed
JP : Nikkei
24,031.35
+166.79 +0.70%
Volume: 0.00
Jan. 22, 2020 3:15p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
28,341.04
+355.71 +1.27%
Volume: 1.34M
Jan. 22, 2020 4:08p
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/zigman2/quotes/210598127/delayed
CN : China: Shanghai
3,060.75
+8.61 +0.28%
Volume: 22.39B
Jan. 22, 2020 3:01p
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/zigman2/quotes/210598015/delayed
CN : Shenhzen Stock Exchange
1,819.61
+13.07 +0.72%
Volume: 35.21B
Jan. 22, 2020 3:00p
loading...
/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,267.25
+27.56 +1.23%
Volume: 608,509
Jan. 22, 2020 3:30p
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/zigman2/quotes/210597977/delayed
TW : Taiwan Stock Exchange
12,118.71
+28.42 +0.24%
Volume: 0.00
Jan. 20, 2020 1:31p
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/zigman2/quotes/210597985/delayed
SG : Singapore: SGX
3,253.93
+6.76 +0.21%
Volume: 0.00
Jan. 22, 2020 5:20p
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/zigman2/quotes/210598100/delayed
AU : S&P ASX
7,132.70
+66.40 +0.94%
Volume: 601,969
Jan. 22, 2020 5:05p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
29,213.43
+17.39 +0.06%
Volume: 105.77M
Jan. 22, 2020 12:08p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,328.42
+7.63 +0.23%
Volume: 671.96M
Jan. 22, 2020 12:08p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
9,414.97
+44.16 +0.47%
Volume: 1.05M
Jan. 22, 2020 12:08p
loading...
/zigman2/quotes/210561789/realtime/sampled
US : Tullett Prebon
109.9360
+0.0670 +0.0610%
Volume: 0.0000
Jan. 22, 2020 12:08p
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Rachel Koning Beals is a MarketWatch news editor in Chicago.

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