Asia Pacific stocks mixed; Fed’s Powell hints there won’t be rate cuts

In Hong Kong, the Hang Seng index added 0.84%, as of its final hour of trading. Shares of AIA soared 4.38%.

South Korea’s Kospi gained 0.42% to end its trading day at 2,212.75, as shares of industry heavyweight Samsung Electronics rose 0.11% and chipmaker SK Hynix surged 2.15%.

The ASX 200 in Australia, on the other hand, declined 0.59% to close at 6,338.40 as majority of the sectors slipped.

Markets in China and Japan are closed for holidays.

Overnight on Wall Street, stocks declined following signs that the Federal Reserve may not be considering rate cuts at the moment.

Federal Reserve officials voted to hold interest rates steady Wednesday, while Fed Chairman Jerome Powell said in a news conference that recent low inflationary pressures may only be “transitory. ” That dashed speculation the central bank was entertaining the idea of a rate cut because of tame inflation.

Data released earlier this week showed the core personal consumption expenditure price index remained unchanged in March and was up 1.6% year over year — below the Fed’s 2% target. U.S. President Donald Trump had urged the Fed to cut rates by 1 percentage point this week because of low inflation.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.659 after a spike from the 97.2 handle in the previous session.

“The dollar should continue to strengthen for 2 main reasons — first the Fed chair made it very clear that when it comes to the economy he sees the glass half full. He expects the outlook to improve as the prior weakness eases. Secondly, he sees no reason to be talking about rate cuts,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in an overnight note.

“This view contrasts sharply with other central banks that have recently expressed concerns about growth and talked openly about the possibility of a response to counter that trend,” Lien said.

On the U.S.-China trade front, sources told CNBC on Wednesday that a trade deal between the two economic powerhouses could be announced by next Friday.

One analyst told CNBC that the market reaction, if and when a deal is announced, could be “a little bit more muted” than expected.

“I think the market has been very much pricing in a big part of the deal being done,” Tai Hui, chief Asia market strategist at J.P. Morgan Asset Management, told CNBC’s “Squawk Box” on Thursday.

The Japanese yen, widely seen as a safe-haven currency, traded at 111.53 against the dollar after seeing highs below 111.2 yesterday. The Australian dollar was at $0.7019 after declining from levels above $0.704 yesterday.

Oil prices declined in the afternoon of Asian trading hours, with the international benchmark Brent crude futures contract slipping 0.44% at $71.86 per barrel and U.S. crude futures falling 0.41% at $63.34 per barrel.

— CNBC’s Fred Imbert contributed to this report.