Asia Market Wrap 17 September: The Fed Hike Crosses to Hong Kong at 4.25 Percent
Asia split on Thursday over the first session after the Federal Reserve’s quarter point rise: Hong Kong’s Base Rate moved to 4.25 percent under the peg’s own formula and the Hang Seng led the board’s decliners at 0.44 percent lower, while Taiwan’s Taiex led the gainers at 0.96 percent higher and Tokyo’s broad Topix outran the Nikkei by nearly half a percentage point. Wednesday’s rise took the target range to 3.75 to 4 percent on a unanimous vote, the first increase in more than three years per Reuters, and the projections published with it put the median rate for the end of 2026 at 4.1 percent, broadly consistent with one further quarter point increase from the new range on our reading. Brent crude traded at 103.62 dollars a barrel at our 10:22 GMT capture, down 2.09 percent from Wednesday’s settlement.
Hong Kong’s peg passes the rise through
The Hong Kong Monetary Authority set its Base Rate at 4.25 percent with immediate effect on Thursday, under a formula that takes the higher of two legs: 50 basis points above the lower end of the US federal funds target range, which now gives 4.25 percent, or the average of the five day moving averages of the overnight and one month Hong Kong interbank rates, which stands at 2.50 percent. The gap between the two legs is 175 basis points on our calculation: the US rate leg, rather than the interbank leg, determined the new Base Rate, with Hong Kong’s own interbank averages sitting far below it.
Equities priced the same mechanics. The Hang Seng closed 0.44 percent lower at 24,604.29, the board’s weakest session, and now stands 0.26 percent below Tuesday’s close across the two days spanning the decision, on our calculation, the only index on our board to lose ground over the pair. The mainland, which sets its own policy, gave back part of Wednesday’s advance rather than tracking the rise: the Shanghai Composite closed 0.41 percent lower and the Shenzhen Component 0.33 percent lower, keeping two day gains of 0.29 percent and 0.92 percent on our count.
Tokyo’s breadth and Taipei’s lead into Friday
Japan rose with one decision behind it and its own ahead. The Topix added 0.80 percent to 4,094.19 while the Nikkei 225 added 0.33 percent to 64,136.25, a 0.47 percentage point gap in the broad market’s favour on our calculation, and over the two sessions spanning the US decision the Topix is up 1.41 percent against the Nikkei’s 1.03 percent. The yen firmed 0.37 percent to 155.69 to the dollar ahead of Friday’s Bank of Japan decision; as our Wednesday wrap carried, the network’s survey found about 89 percent of respondents expecting a quarter point rise to 1.25 percent.
Taiwan’s Taiex rose 0.96 percent to 46,288.00, the board’s best on the day and, at 1.71 percent, the best across the two sessions on our count. Korea’s Kospi finished 2.56 points lower at 6,715.41, holding effectively all of Wednesday’s 1.37 percent rise for a two day gain of 1.33 percent. The Straits Times added 0.45 percent, the ASX 200 0.41 percent and India’s Nifty 50 0.23 percent. World shares edged higher and the dollar held near a seven week high after the decision, per Reuters, with the months long selloff in bonds calming as oil eased.
Top gainers
| Index | Close | Change |
|---|---|---|
| Taiex (Taiwan) | 46,288.00 | +0.96% |
| Topix (Japan) | 4,094.19 | +0.80% |
| Straits Times (Singapore) | 5,660.52 | +0.45% |
| S&P/ASX 200 (Australia) | 8,732.40 | +0.41% |
| Nikkei 225 (Japan) | 64,136.25 | +0.33% |
| Nifty 50 (India) | 23,270.60 | +0.23% |
Top gainers, closes of Thursday 17 September 2026 from the vendor’s feed, all sessions ended before our 10:22 GMT capture, ranked by change; every change reconciles against our published 16 September closes.
Top losers
| Index | Close | Change |
|---|---|---|
| Kospi (South Korea) | 6,715.41 | -0.04% |
| Shenzhen Component (China) | 13,409.91 | -0.33% |
| Shanghai Composite (China) | 3,875.60 | -0.41% |
| Hang Seng (Hong Kong) | 24,604.29 | -0.44% |
Top losers, same session and basis.
Commodities and currencies
| Instrument | Level | Change |
|---|---|---|
| Gold, COMEX (Dec’26), dollars an ounce | 4,351.40 | -0.82% |
| Silver, COMEX (Dec’26), dollars an ounce | 64.44 | -0.74% |
| Brent Crude, ICE (Nov’26), dollars a barrel | 103.62 | -2.09% |
| WTI Crude, NYMEX (Oct’26), dollars a barrel | 100.79 | -1.60% |
| US Dollar Index (DXY) | 100.154 | -0.10% |
| Euro/Dollar | 1.1478 | +0.12% |
| Sterling/Dollar | 1.3400 | +0.14% |
| Dollar/Yen | 155.69 | -0.37% |
Intraday quotes captured at 10:22 GMT in a single call, fixed row order; the 4 commodity rows are measured against Wednesday’s settlements as carried in the price feed, settlement to snapshot, and the currency rows are on the vendor’s daily basis. Wednesday’s precious metals settlements were fixed before the rate decision was published, on our reading of the settlement windows.
Why it matters: what Thursday’s board maps is the decision’s transmission rather than its direction, on our reading. A pegged system imports the rise mechanically, Hong Kong’s within a day by formula, just as five Gulf central banks moved on Wednesday night, while Kuwait, whose dinar tracks a currency basket rather than the dollar alone, left its discount rate at 3.5 percent, as our rates article carried; economies that float took it through their currencies instead, the yen firmer even against a dollar near a seven week high. And the oil unwind is doing more for the region than the quarter point costs it: Brent at our capture stands 3.84 percent below our Wednesday reading on our calculation, relief for the import bills in Japan, Korea and India that higher crude had been inflating. Of the 10 indices we published today, the Taiex led at 0.96 percent higher and the Hang Seng lagged at 0.44 percent lower.
Outlook: the Bank of England held its rate at 3.75 percent on Thursday by a 6 to 3 vote, with three members preferring a quarter point rise, and the Bank of Japan concludes on Friday. The next US meeting falls on 27 and 28 October, per the published calendar. The Gulf and Egypt trade this afternoon with Wednesday night’s regional rate moves already in hand, and our Middle East and Europe wraps follow today.
Sources: CNBC, Hong Kong Monetary Authority, Bank of England, Federal Reserve, Reuters, The Edge.
