Markets across Asia-Pacific displayed a mixed reaction on Wednesday as investors appeared largely unaffected by the recent shutdown of the US federal government, which continues to spark uncertainty over fiscal policy in Washington.
Gold prices extended their rise, climbing 0.09% to reach a new record of $3,875.32 per ounce by mid-morning Singapore time, displaying the metal’s appeal amid global economic and geopolitical uncertainties.
In Japan, the Bank of Japan published the latest results of its quarterly Tankan survey, a key gauge of business sentiment among domestic companies. Optimism among large manufacturers edged up slightly to +14 in the third quarter from +13 the previous term but fell short of economists’ expectations of +15 according to a Reuters poll.
The non-manufacturing sector remained stable with an index reading of +34. A positive Tankan score indicates a majority of firms hold an optimistic outlook for business conditions.
Attention in Asia also centres on India, where the Reserve Bank is set to announce its interest rate decision later in the day amid growing concerns around inflation and economic growth.
Japan’s Nikkei 225 index declined 1.16%, and the broader Topix index fell by 1.71%, reflecting investor caution because of global uncertainties. South Korea’s Kospi index advanced 0.79%, while the smaller-cap Kosdaq index also rose by 0.56%.
Notably, Taiwan’s weighted index outperformed regional peers, gaining 1.14%, propelled by strength in healthcare and technology shares. Taiwan Semiconductor Manufacturing Company (TSMC) saw its shares rise 2.3%, benefiting from heightened investor interest following Nvidia’s milestone of exceeding a $4.5 trillion market capitalisation.
Meanwhile, Australia’s S&P/ASX 200 slipped 0.26%. Markets in mainland China and Hong Kong remained closed due to a public holiday, limiting activity in some of Asia’s major financial centres.
On Wall Street, the momentum carried over with the S&P 500 rising 0.41% to close at 6,688.46 and the Nasdaq Composite gaining 0.31% to finish at 22,660.01. The Dow Jones Industrial Average increased by 81.82 points, or 0.18%, to a record closing high of 46,397.89.
Amid these developments, the regional market divergence reveals investors weighing strong corporate earnings and advancements in technology against the implications of U.S. political gridlock and evolving global economic risks.