Asia stocks rise after Fed meeting, tech earnings

Asian stocks rose slightly on Thursday as investors weighed up the Federal Reserve’s interest rate pause and a round of earnings from US technology giants. The yen strengthened ahead of a speech by a central bank official.

Shares in Japan edged higher after an earlier decline, boosting a gauge of Asian equities. But many of the region’s biggest equity markets — including those in Hong Kong, mainland China and South Korea — are closed for the Lunar New Year holiday.

Focus is now shifting to a speech by Bank of Japan Deputy Governor Ryozo Himino, who will talk at 3:10 p.m. Tokyo time. The Bank of Japan hiked rates last week, and traders think the Fed’s signal that it is in no rush to cut rates could give him room to strike a more hawkish tone.

“Himino has room to go bullish for more rate hikes” and may even change language from the last policy statement, said Shoki Omori, chief global desk strategist at Mizuho Securities Co. in Tokyo. “Given that markets are not pricing in a very near term hike, the yen will likely richen quickly if Himino sounds surprisingly hawkish on Japan’s economy and inflation.”

The yen gained as much as 0.5% against the dollar as fast money traders lined up bets on the currency, according to an Asia-based FX trader.

Investors in the region had plenty to digest from US trading hours — but none of it pointed to a clear direction for stocks. The Fed’s decision to hold rates was widely expected, and earnings from International Business Machines Corp., Meta Platforms Inc., Microsoft Corp. and Tesla Inc. sent mixed signals to investors.

Tesla climbed after saying it expects vehicle sales to climb this year after a challenging 2024. Meta rebounded after an initial slide that followed their results while IBM soared on better-than-projected sales and profit.

Shares in Microsoft, meanwhile, fell as growth in its cloud-computing business slowed during the last three months of last year. Elsewhere, SoftBank shares whipsawed after a report that the company was considering a $25 billion investment in OpenAI.

The recent volatility among tech giants has been particularly worrisome for Wall Street, as the S&P 500’s leadership hasn’t been this concentrated in more than 20 years. Data shows that less than one-third of index members were able to outperform the S&P 500 during the past two years, as Bank of America Corp. strategist Michael Hartnett has called out.

Gains for US futures pointed to a reversal of the small declines in the major indexes on Wednesday.

Some traders looked for clues in the Fed’s decision to remove a reference to making progress toward its 2% goal. Fed Chair Jerome Powell later said that was just a decision to shorten the sentence, rather than send any sort of meaningful signal.

“I find this hard to believe given that the Fed knows the market is hanging on its every phrase and wording,” said Win Thin, global head of markets strategy at Brown Brothers Harriman & Co in New York.

The dollar was down against a Bloomberg basket of currencies, but held firm against the euro and the British pound.

Reserve Bank of Australia Assistant Governor for the Financial System Brad Jones will speak Thursday after soft fourth quarter inflation data. While traders increased the odds the central bank will begin its rate cut cycle next month, markets are yet to fully price a 25 basis point reduction, according to swaps data compiled by Bloomberg.

In commodities, oil steadied as investors waited for clarity on the US administration’s plans for trade policy, after Donald Trump’s pick for commerce secretary said Canada and Mexico may be able to avoid levies.