Nikkei Closes Slightly Higher, South Korea Raises Interest Rates

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The Tokyo stock exchange closed slightly higher on Thursday. Investors did not take major risks ahead of the important Jackson Hole central bankers meeting, which begins later in the day. All eyes are on US central bank president Jerome Powell, who will give a speech on Friday.

 

Particular attention will be paid to whether Powell says anything about when the Federal Reserve will start phasing out corona support. In South Korea, interest rates were raised for the first time in nearly three years.

Japan’s main index, the Nikkei 225, ended 0.1 percent in the plus at 27,742.29 points. Toshiba climbed more than 1 percent. According to the business newspaper The Wall Street Journal, American technology group Western Digital talks with chip company Kioxia about a merger. The Japanese Kioxia is the former chip branch of technology group Toshiba, which still has more than 40 percent interest in the company. The deal would be worth $20 billion.

The Kospi in Seoul was down 0.5 percent in the meantime. The South Korean central bank raised interest rates by 25 basis points to 0.75 percent. Therefore, South Korea is the first major economy to raise interest rates again since the outbreak of the corona pandemic to contain rising inflation and prevent the economy from overheating. In addition, the sharp rise in house prices and rising household debt pose a threat to financial stability in the country.

The Chinese stock markets also lost ground. The gauge in Shanghai fell 0.6 percent, and the Hang Seng index in Hong Kong fell 1.4 percent. Chinese internet group Tencent lost 0.6 percent and online store company Alibaba fell 1.8 percent. In Taiwan, TSMC climbed 1.5 percent. The world’s largest chipmaker looks set to increase its chip prices by 10 to 20 percent due to the continued strong demand for chips.

The All Ordinaries in Sydney lost 0.6 percent. However, Qantas rose 3 percent to its highest level since April. The Australian airline managed to reduce the loss in the past financial year and hopes to be able to fly again from December to countries with a high vaccination rate.

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