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Asia markets: Fed minutes, currencies, oil

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SINGAPORE — Asia-Pacific markets are set to open mixed on Thursday as investors watch for market reaction to the latest Fed minutes.

Japan’s futures pointed to a higher open. The Nikkei futures contract in Chicago was at 26,305 while its counterpart in Osaka was at 26,250. That compared against the Nikkei 225’s last close at 26,107.65.

SPI futures in Australia were at 6,528, lower than the S&P/ASX 200‘s last close at 6,594.5.

Federal Reserve officials recognized that a “more restrictive stance” in policy could be suitable if inflation doesn’t ease, even if it slows the economy, the meeting minutes said.

“Participants recognized that policy firming could slow the pace of economic growth for a time, but they saw the return of inflation to 2 percent as critical to achieving maximum employment on a sustained basis,” the document said.

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Fed officials also said a hike of 50 or 75 basis points would be likely at the July meeting.

The Federal Open Market Committee is concerned about inflation expectations becoming unanchored, a ANZ research note said on Thursday.

“The Fed is understandably eager to reinforce to the public that it has got this, and hiking 75bp [and signaling many more hikes to come] certainly reinforces the message,” the note said.

U.S. markets gained slightly on Wednesday stateside.

The Dow Jones Industrial Average rose 69.86 points, or 0.23%, to 31,037.68. The S&P 500 advanced 0.36% to 3,845.08, and the Nasdaq Composite traded 0.35% higher to close at 11,361.85.

In other news, Beijing said vaccinations would be required to enter crowded places such as cinemas and gyms in the city starting next week.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 107.096, continuing to strengthen sharply.

The Japanese yen traded at 135.96 per dollar, and the Australian dollar was at $0.6783.

U.S. West Texas Intermediate futures fell 0.23% to $98.30 per barrel in Asia’s morning trade after two straight days of falls.

The U.S. crude benchmark settled 1% lower on Wednesday after an 8% tumble on Tuesday. Brent crude futures settled 2% down at $100.69 after falling below the $100 level during the session.

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