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in the early morning of september 19th, beijing time, the federal reserve announced its first interest rate cut since 2020, lowering the benchmark interest rate by 0.5 percentage points to prevent a slowdown in the labor market. on the morning of the 19th, the hong kong monetary authority also lowered its benchmark interest rate by 50 basis points to 5.25%, and the world entered a cycle of interest rate cuts.

after the fed started the interest rate cut cycle, asia-pacific markets opened higher across the board, with the nikkei 225 index opening up 1.7% and the south korean composite index opening up 0.8%. since then, japanese stocks have continued to rise, while south korean stocks have fallen. the a-share market opened high and fell, then quickly rebounded.

in the commodity market, the spot gold price once reached $2,600 per ounce, a record high. the japanese yen fell sharply, with the us dollar rising nearly 1% against the japanese yen to 143.

the dollar index rose, reaching a high of 101.4765.

nikkei 225 index surges more than 900 points

in the morning of september 19, after the federal reserve announced a rate cut, the japanese stock market opened higher and continued to rise. as of 10:00 beijing time, the nikkei 225 index rose 2.49%, a surge of more than 900 points.

among individual stocks, toyota motor rose more than 5%, hitachi rose more than 4%, keyence rose more than 3%, fast retailing rose more than 2%, and sony and softbank group rose more than 1%.

the japanese yen fell sharply. as of 9:29 beijing time, the us dollar rose 0.97% against the japanese yen to 143.6730.

the south korean stock market opened high and ended low. as of 9:28 beijing time, the south korean composite index fell 0.61%. chip stocks plummeted, with samsung electronics falling more than 2% and sk hynix falling more than 8%.

south korea's central bank governor chang-yong rhee said the federal reserve's decision to cut interest rates has eased pressure on south korea's foreign exchange market and soothed investors' concerns about the won.

cicc said that judging from the interest rate decision, the fed adopted a more aggressive 50 basis point rate cut than expected. the monetary policy statement pointed out that recent inflation data gave policymakers more confidence in achieving the 2% inflation target. the fed's actions show that its reaction function has completely shifted from focusing on inflation to focusing on employment. this is a signal that the fed has a low tolerance for rising unemployment and officials do not want to take risks that would undermine the bright prospects of a "soft landing". based on powell's statement, any unemployment rate above 4.4% in the future may trigger more rate cuts. this also shows that the fed will maintain a "dovish" stance until the data on the job market stabilizes. looking ahead, as the fed has adopted a more substantial rate cut, the possibility of a soft landing in the economy will further increase in the short term.

a-share market opened high and ended low

the a-share market opened higher across the board, with the shanghai composite index, shenzhen component index, and chinext index opening up 0.22%, 0.29%, and 0.64%, respectively. concept sectors such as huawei hongmeng and network security were active. defense and military industry, agriculture, forestry, animal husbandry, and fishery, and computer industries led the gains. however, as of 10:00, most of the major a-share indices opened higher and then fell, then rebounded quickly.

the hong kong stock market reacted little. as of 9:28, the hang seng index fell 0.15% and the hang seng tech index rose 0.07%.

huatai securities said that overall, the fed started a rate cut cycle with 50 basis points, catching up with the pace of rate cuts by other major central banks; the 50 basis point rate cut did not cause market panic; it is expected that the fed will continue to cut interest rates, but the 50 basis point "step" may not be the norm. looking forward, it is expected that the fed will continue to promote rate cuts in the future, and the cumulative rate cuts are expected to reach 100-125 basis points this year; the fed's continuous rate cut cycle is expected to further reduce the pressure of foreign exchange outflows on the rmb exchange rate caused by the interest rate differential, and open up domestic monetary policy space.

luo zhiheng, chief economist and director of the research institute of yuekai securities, said that the fed's interest rate cut has opened up room for domestic monetary policy. from the external environment, the fed's interest rate cut is expected to reduce the constraints on further reductions in the reserve requirement ratio and interest rates in china. from the internal environment, the main contradiction in the current economy is the imbalance between supply and demand caused by insufficient domestic effective demand. it is recommended that macroeconomic policies should continue to work hard and be more powerful to boost consumer spending and corporate investment demand. the fed's interest rate cut cycle is conducive to hedging the risks of the global economic downturn, supporting the continued resilience of china's exports, and is also positive for the domestic stock market, bond market and rmb exchange rate.