Asia-Pacific markets trade mixed as investors assess U.S.' 15% tariffs on South Korea; await Bank of Japan's rate decision

Asia-Pacific markets traded mixed Thursday as investors assessed the U.S.' blanket 15% tariffs on imports from South Korea and awaited details on the Bank of Japan's policy decision.

Japan's central bank is widely expected to stand pat on short-term interest rates at 0.5% for the fourth consecutive time, when its two-day policy meeting concludes later in the day.

Asia-Pacific markets start the day mixed

Asia-Pacific markets opened mixed Thursday.

Japan's Nikkei 225 benchmark moved up 0.21% while the broader Topix index ticked up 0.28%, as of 8.10 a.m. Singapore time (8.10 p.m. ET Wednesday).

In South Korea, the Kospi index fell 0.14% while the small-cap Kosdaq was flat.

Over in Australia, the S&P/ASX 200 benchmark fell 0.53%.

Investors will be keeping a close watch on South Korean markets after U.S. President Donald Trump announced a blanket tariff of 15% on the country's exports to the U.S. Japanese markets will also be watched keenly as the Bank of Japan is expected to stand pat on short-term interest rates at 0.5% at the close of its two-day policy meeting later in the day.

Japan's benchmark Nikkei 225 was set to open higher, with the futures contract in Chicago at 40,855 while its counterpart in Osaka last traded at 40,730, against the index's Wednesday close of 40,654.70.

Futures for Hong Kong's Hang Seng index stood at 24,934, pointing to a weaker open compared with the last close of 25,176.93.

Australia's S&P/ASX 200 was set to start the day lower with futures tied to the benchmark at 8,694, compared with its last close of 8,756.40.

S&P 500 futures, Nasdaq 100 futures rise

S&P 500 futures and Nasdaq 100 futures rose on Wednesday night, boosted by after-hours gains in shares of Meta Platforms and Microsoft.

Futures tied to the broad market benchmark rose 0.6%, while Nasdaq 100 futures gained 0.9%. Futures tied to the Dow Jones Industrial Average rose 23 points, or 0.05%.

S&P closes lower

The S&P 500 closed lower on Wednesday and gave up its gain from earlier in the session after Federal Reserve Chair Jerome Powell threw some cold water on the prospects of a September rate cut.

The broad market index lost 0.12% to close at 6,362.90. The Nasdaq Composite added 0.15% to 21,129.67, while the Dow Jones Industrial Average fell 171.71 points, or 0.38%, to finish the session at 44,461.28.

Tariff effects on inflation still need to be seen, Powell says

The Fed can keep the interest rate steady while waiting to see if tariff policy pushes up inflation, Powell said.

“Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen,” Powell said.

Powell said a “reasonable base case” could be that effects to inflation will be “short lived.” But he also cautioned that levies could cause inflationary changes that are “more persistent.”

“Our obligation is to keep longer term … inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” Powell said.

“For the time being, we're well positioned to learn more about the likely course of the economy and the evolving balance of risks before adjusting our policy stance,” he added. “We see our current policy stance as appropriate to guard against inflation risks.”

Divided Fed keeps rates unchanged

The Fed kept monetary policy unchanged, as was widely expected. However, two central bank officials — Christopher Waller and Michelle Bowman — dissented in the decision, pushing for the Fed to cut the overnight rate by 0.25 percentage point.

This was the first time since 1993 that the Fed's policy decision was met with so much dissent.