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But regional trading volumes were somewhat limited on account of market holidays in China and Hong Kong. Chinese markets are closed for the remainder of the week.
Wall Street indexes ended lower on Wednesday after Powell said in testimony before the House Financial Services Committee that relatively high inflation is likely to result in more rate hikes, although he did not specify whether a July hike was on tap.
Markets are now awaiting more cues on monetary policy as Powell testifies before the Senate Banking Committee later on Thursday. But the Fed chief’s comments, coupled with a hawkish outlook from the central bank last week, saw broader markets positioning for more interest rate hikes in the coming months.
Australia’s ASX 200 was the worst performer for the day, losing 1.5% as markets continued to lock in profits after a seven-day rally in the index. Heavyweight mining stocks were also dented by uncertainty over global commodity demand, following a somewhat underwhelming interest rate cut in China this week.
Philippine shares led losses in Southeast Asia with a 0.5% decline, while South Korea’s KOSPI added 0.5%.
Japan’s Nikkei 225 index fell 0.1%, while the broader TOPIX jumped 0.6% as more Bank of Japan members posited a dovish outlook for monetary policy. The Japanese indexes were also trading close to 33-year highs.
BOJ board member Asahi Noguchi said on Thursday that the central bank had to maintain its ultra-loose policy in the near-term to ensure steady wage growth.
His comments echoed those from peer Seiji Adachi on Wednesday, and also come after the minutes of the BOJ’s April meeting showed that members almost unanimously supported keeping policy loose.
The BOJ’s stance has made it among the few outliers in global central banks this year, and has attracted a swathe of foreign capital into Japanese stocks on the prospect of interest rates remaining low in the country.
Singapore-traded futures for India’s Nifty 50 index fell 0.2% in morning trade, indicating a weak open for the index after it settled at a record high on Wednesday. The BSE Sensex 30 also hit a record high before ending slightly lower.
While optimism over the Indian economy has driven strong capital inflows into local stocks, analysts warned that small and medium-cap stocks may be due for a correction, given the weak global economic outlook.
