Asian markets opened mixed but with a modest upward bias on Thursday as investors absorbed the Federal Reserve’s first interest-rate increase in more than three years. Japan and South Korea moved higher, while Hong Kong and mainland Chinese equities came under pressure.
TOKYO / HONG KONG / SEOUL — September 17, 2026
The Federal Reserve dominated trading across Asia after raising its benchmark interest rate by 25 basis points overnight to a range of 3.75–4.00 per cent.
The decision was widely anticipated, but the message from Washington was relatively hawkish. Policymakers indicated that another increase could follow this year as the central bank continues its effort to bring inflation back towards its 2 per cent target.
Japan moves higher
Japanese equities responded positively in early trading. The Nikkei 225 gained around 1 per cent during the morning session, helped by bargain hunting and strength in pharmaceutical and machinery stocks.
The stronger US dollar also pushed the yen lower, providing some support for Japanese exporters. Investors are simultaneously preparing for Friday’s Bank of Japan decision, with markets expecting another increase in Japanese interest rates.
South Korea joins the advance
South Korea also opened firmly higher. The KOSPI initially climbed 0.91 per cent to 6,779.02, with technology shares contributing to the advance.
The index later moderated its gains but remained positive. Defence, aerospace and shipbuilding shares were among the strongest sectors during the morning, while foreign investors continued to sell Korean equities.
China and Hong Kong move lower
The picture was different in Greater China.
The Shanghai Composite opened 0.38 per cent lower at 3,877, while the Shenzhen Component declined 0.33 per cent at the opening.
Hong Kong also weakened. The Hang Seng Index was down around 0.8 per cent shortly after trading began, while the Hang Seng Tech Index lost about 0.5 per cent.
The CSI 300 on the mainland also slipped as investors considered what higher US rates and a stronger dollar could mean for capital flows and financial conditions across the region.
Oil offers some relief
One factor helping sentiment was a retreat in oil prices.
Brent crude moved back towards $105 a barrel as concerns over supply disruptions eased. For Asian economies heavily dependent on imported energy, lower oil prices can reduce pressure on inflation, corporate costs and trade balances.
At the same time, the dollar strengthened to a seven-week high against major currencies as shorter-term US Treasury yields moved higher following the Fed decision.
Central banks take centre stage
Thursday’s opening shows an Asian market increasingly shaped by monetary policy rather than a single regional trend.
The MSCI index of Asia-Pacific shares outside Japan was up around 0.4 per cent in early trading, despite losses in China and Hong Kong.
Attention now moves from Washington to other central banks. The Bank of England announces its decision later on Thursday, while the Bank of Japan takes centre stage on Friday.
For Asian investors, the question is no longer simply whether interest rates will remain high.
It is whether a new global tightening cycle is beginning — and how quickly markets, currencies and companies across the region will have to adjust.
Newshub Editorial in Asia – 17 September 2026
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