Beijing, China (BBN)-Asian stock markets are trading in negative territory after the latest minutes from the Federal Reserve indicate the US could raise interest rates later this year.
The US Federal Reserve said it would raise rates in June if conditions were right, reports BBC.
South Korea’s Kospi is down 0.2 per cent, as is Australia’s S&P/ASX 200.
In Greater China, Hong Kong’s Hang Seng fell 0.9 per cent but the Shanghai Composite is up 0.3 per cent.
According to analysts, the market believes the probability of a rate hike in June has now increased to 32 per cent.
“The minutes cited the strength of the labour market, improving economic conditions, better inflation and declining global risks as reasons to begin to normalise sooner than the market expected,” Alex Furber from CMC Markets said.
“The prospect of higher rates and the market’s reliance on monetary policy to prop up asset prices worried investors, which pared early gains on the news.”
However, Japanese shares rose after the yen weakened about 1 per cent against the US dollar following the minutes.
The benchmark Nikkei 225 index rose 0.7 per cent and the broader Topix gained 0.6 per cent in early trading.
Data showing that Japanese machinery orders rose in March also helped sentiment.
Core orders rose by 5.5 per cent from the previous month, beating forecasts for growth of 0.5 per cent.
Shares of Japan’s Suzuki Motors are also bouncing back from yesterday’s sell off.
They rose by 5 per cent in Tokyo after the car maker denied they manipulated fuel efficiency data.
Suzuki stock fell by as much as 15 per cent on Wednesday on reports the firm may have done “improper” testing.