Asia stocks set to dip as the Fed signals low rates for years; Australia's August jobs data ahead

SINGAPORE — Stocks in Asia-Pacific were set to trade lower at the Thursday open as investors react to overnight developments from the U.S. Federal Reserve.

Futures pointed to a lower open for Japanese stocks. The Nikkei futures contract was at 23,365 while its counterpart in Osaka was at 23,280. That compared against the Nikkei 225’s last close at 23,475.53.

Shares in Australia also looked poised to dip. The SPI futures contract was at 5,950.0, as compared to the S&P/ASX 200’s last close at 5,956.10.

On the economic data front, Australia’s employment data for August is expected to be out at around 9:30 a.m. HK/SIN.

The Bank of Japan is also set to release its monetary policy statement at around 12:30 p.m. HK/SIN.

Fed reaction watched

Investor reaction to recent announcements from the Fed will be watched, as members of the U.S. central bank’s policymaking committee indicated the overnight rate could stay close to zero for years to reach its 2% inflation target.

“With regard to interest rates, we now indicate that we expect it will be appropriate to maintain the current zero to 0.25% target range for the federal funds rates until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time,” said Fed Chairman Jerome Powell.

Overnight on Wall Street, the Dow Jones Industrial Average closed 36.78 points higher, or 0.1%, at 28,032.38. The S&P 500, meanwhile, slipped 0.5% to finish its trading day at 3,385.49. The tech-heavy Nasdaq Composite dropped 1.3% to close at 11,050.47.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, sat at 93.214 after earlier rising from levels below 93.0.

The Japanese yen traded at 105.02 per dollar following its strengthening yesterday from levels above 105.2 against the greenback. The Australian dollar changed hands at $0.7301 after seeing levels around $0.733 yesterday.

Here’s a look at what’s on tap:

  • Australia: Labor force data for August at 9:30 a.m. HK/SIN
  • Japan: Bank of Japan’s monetary policy statement at 12:30 p.m. HK/SIN

— CNBC’s Fred Imbert contributed to this report.