Shares trade mixed in Asia-Pacific as investors turn cautious; Singapore’s STI up 1.4%

SINGAPORE — Shares traded mixed across Asia-Pacific markets on Wednesday as investors turned cautious, despite remarks overnight from Federal Reserve Chair Jerome Powell that attempted to ease some worries around higher interest rates and inflation.

In Australia, the benchmark ASX 200 fell 0.92%, led by losses in most sectors, including a 0.57% drop in the heavily weighted financials subindex. Among the so-called Big Four banks in the country, ANZ shares were down 0.63%, Commonwealth Bank shares were down 0.66%, and Westpac fell 0.97%. National Australia Bank shares hovered near the flatline.

Japanese markets returned to trade after being shut on Tuesday for a public holiday. The Nikkei 225 fell 0.74% while the Topix index was down 0.88%.

South Korean shares bucked the broadly downward trend as the Kospi index reversed early losses to trade up 0.44%. The Kosdaq index rose 0.51%. In Singapore, the Straits Times Index advanced 1.41%, while Hong Kong’s Hang Seng Index dropped 0.52%.

Chinese mainland shares also traded lower: The Shanghai composite dropped 0.49% while the Shenzhen component index fell 0.55%.

The session in Asia follows a mixed finish on Wall Street, where the Dow Jones Industrial Average reversed steep losses following Powell’s remarks.

Powell said in his testimony to U.S. Congress that the American economy is a long way from its employment and inflation goals and that it will likely take time for substantial further progress to be achieved. He added that inflation is still “soft” and that the Fed is committed to current policy.

Central banks are taking a mixed view on the rise in yields, according to Tapas Strickland, director of economics and markets at the National Australia Bank.

“Chair Powell has managed to tread that fine line of endorsing market moves, but not adding to them by re-iterating his dovish stance,” Strickland wrote in a morning note.

In the currency market, the U.S. dollar dipped 0.15% to 90.034 against a basket of its peers, after earlier touching lows around 89.982. The Australian dollar strengthened 0.34%, changing hands at $0.7938 while the Japanese yen was at 105.4 per dollar.

The greenback “fell in line” with U.S. equities following Powell’s Congressional testimony, but the moves in the currency were “modest,” according to Carol Kong, a currency strategist at the Commonwealth Bank of Australia.

Better U.S. and global growth prospects remain consistent with a downtrend in the counter-cyclical dollar, Kong said.

Elsewhere, oil prices dipped. U.S. crude futures were down 0.7% at $61.24 a barrel on Wednesday during Asian trading hours while global benchmark Brent lost 0.4% to $65.11.