Asia-Pacific markets had mixed results on Thursday following comments from U.S. Federal Reserve Chair Jerome Powell, suggesting a possible rate cut in September if inflation data remains "encouraging."

 

However, Japan's Nikkei 225 dropped 2.49% to close at 38,126.33, and the broader Topix plummeted 3.24% to 2,703.69. The losses were primarily driven by declines in real estate stocks and major exporters as the yen strengthened.

 

A strong yen reduces the competitiveness of Japanese exports, and increased borrowing costs typically affect real estate companies negatively.

 

On Wednesday, the Bank of Japan raised its benchmark interest rate to "around 0.25%," its highest level since 2008. The yen fell below the 150 level against the dollar late Wednesday, appreciating by 0.9% and currently trading at 148.61.

 

The Japanese finance ministry disclosed that it spent 5.53 trillion yen ($36.8 billion) on foreign exchange intervention.

 

Toyota reported a 12.2% increase in revenue to 11.84 trillion yen ($79.05 billion) for its first quarter and a 16.7% rise in operating income, which reached 1.31 trillion yen. Net income grew 2.8% year over year to 1.33 trillion yen. Despite these figures, Toyota's shares fell by 8.29%.

 

The Fed's Federal Open Market Committee meeting concluded on Wednesday with the decision to keep the federal funds rate at its current range of 5.25% to 5.5%.

 

Powell cautioned that a rate cut is not definite, although he also tentatively ruled out a 50-basis-point reduction.

 

"I don't want to be overly specific about our next steps, but a 50-basis-point cut is not something we're considering right now," he stated.

 

Investors in Asia are also evaluating business activity data from around the region, including July's purchasing managers index data from China, Japan, and South Korea, in addition to the Fed's comments.

 

Australia's S&P/ASX 200 set new all-time highs, increasing by 0.28% to finish at 8,114.7.

 

South Korea's Kospi rose 0.25% to end at 2,777.68, while the small-cap Kosdaq gained 1.29% to 813.53. Reuters reported that the country's exports grew at the fastest pace in six months in July, based on preliminary data.

 

South Korean exports increased by 13.9% year-over-year to $57.49 billion, following a 5.1% rise the previous month. However, this figure was below the 18.4% increase anticipated by economists surveyed by Reuters.

 

Hong Kong's Hang Seng index was down 0.13% in its final hour of trading, while the mainland China's CSI 300 dropped 0.66% to close at 3,419.27.

 

Hong Kong's GDP grew by 3.3% year-over-year in the second quarter, exceeding economists' expectations of a 2.7% rise as polled by Reuters.

 

China's factory activity contracted in July, according to a survey by Caixin and S&P Global. The manufacturing PMI was 49.8, below the expansionary threshold and against the anticipated figure of 51.5 from economists polled by Reuters.

 

A PMI above 50 indicates sector expansion, while a figure below 50 indicates contraction.

 

Overnight in the U.S., stocks surged after the Federal Reserve decided to keep interest rates unchanged, as expected. Traders also reinvested in large-cap tech stocks.

 

The S&P 500 climbed 1.58% to close at 5,522.30, and the Nasdaq Composite jumped 2.64% to 17,599.40, marking their best session since February.

 

The Dow Jones Industrial Average added 99.46 points, or 0.24%.