Asia-Pacific markets trade mixed as China and U.S. keep interest rates steady

Asia-Pacific markets traded mixed Thursday as China’s central bank kept interest rates steady, after the U.S. Federal Reserve kept benchmark rates unchanged overnight.

Australia’s S&P/ASX 200 traded 1.02% higher.

South Korea’s Kospi climbed 0.28% while the small-cap Kosdaq rose 0.55%.

Hong Kong’s Hang Seng Index fell 1.36% and mainland China’s CSI 300 dipped 0.17% after China kept its key lending rates unchanged as Beijing juggles propping up growth and stabilizing its currency amid mounting trade frictions.

The People’s Bank of China kept the 1-year loan prime rate at 3.1% and the 5-year LPR at 3.6%, where they have been since a quarter-percentage-point cut in October.

Japan markets were closed for a holiday.

The Federal Reserve held interest rates steady at 4.25% to 4.5% on Wednesday, while signaling that they anticipate two rate reductions later in the year. Their economic projection also foresaw rising inflation and reduced economic growth.

Fed Chair Jerome Powell also noted that while economists sounded the likelihood of a recession, a severe downturn is not likely. The Fed’s decision comes against a backdrop of festering tensions between the U.S. and its key trade partners.

U.S. stock futures were little changed after the three major averages rallied as the Fed maintained its outlook for two interest rate cuts this year.

The three major U.S. indexes closed higher. The S&P 500 clawed back more of the rout since late February that took the benchmark briefly into correction territory. The Dow Jones Industrial Average climbed 383.32 points, or 0.92%, and closed at 41,964.63. The S&P 500 jumped 1.08% to end at 5,675.29, and the Nasdaq Composite advanced 1.41% to settle at 17,750.79.

— CNBC’s Sean Conlon and Pia Singh contributed to this report.