SINGAPORE — Hong Kong stocks briefly slipped more than 1% while Asia-Pacific markets traded higher on Thursday. The moves came as Singapore tightened monetary policy and Australia announced that its unemployment rate has fallen.
The Hang Seng index was down 0.22% at 20,751.21 at the close.
Mainland China markets were mixed. The Shenzhen Component reversed earlier losses to rise 0.75% to 12,602.78 and the Shanghai Composite was down fractionally at 3,281.74.
In South Korea, the Kospi slipped 0.27% to 2,322.32 and the Kosdaq was up 0.38%.
The Philippines' PSE Composite Index dropped 0.12% to 6,248.13 on Thursday, and the peso stood at 56.1 against the dollar. The country's central bank increased interest rates by 75 basis points in a surprise move in a bid to fight inflation.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.16%.
Asia stocks rise
Stocks climbed elsewhere in Asia.
The Nikkei 225 in Japan pared losses and rose 0.62% to close at 26,643.39 while the Topix index was 0.23% higher at 1,893.13.
Australia's S&P/ASX 200 was 0.44% higher at 6,650.6.
Australia added 88,400 jobs in June, official data showed, much more than the 30,000 that analysts polled by Reuters predicted.
The country's unemployment rate was at 3.5%, lower than the 3.8% expected and a 48-year low, Reuters reported.
Singapore GDP, monetary policy
In economic data, Singapore's Ministry of Trade and Industry said advance estimates show the country's gross domestic product grew 4.8% in the second quarter of 2022 compared to the same period a year ago. That's up from 4% in the first quarter of the year, but lower than the 5.2% growth that analysts in a Reuters poll expected.
The Monetary Authority of Singapore tightened monetary policy in an off-cycle move Thursday. The central bank said it will re-center the mid-point of the exchange rate policy band, known as the Singapore dollar nominal effective exchange rate, up to its prevailing level.
The slope and width of the band will not change, the MAS said. The central bank manages monetary policy through setting the exchange rate and not interest rates.
The SGD should be supported in the near term by this surprise tightening, but stubbornly high inflation means we can't rule out further action from the MAS in October.ING
"Inflation risks will certainly be tackled," Vishnu Varathan, head of economics and strategy at Mizuho Bank, told CNBC's "Squawk Box Asia" on Thursday. He said the MAS has more bandwidth and flexibility because they tightened policy upfront.
Singapore's Straits Times index fell 1.15% on Thursday afternoon, while the Singapore dollar rose to 1.4001 against the greenback following the announcement.
"The SGD should be supported in the near term by this surprise tightening, but stubbornly high inflation means we can't rule out further action from the MAS in October," according to a Thursday note from ING.
U.S. inflation report
Consumer prices rose 9.1% from a year ago, above the 8.8% Dow Jones estimate. That's the fastest pace since November 1981, and investors are concerned about how aggressive the Fed will have to be to fight rising prices.
"Stubbornly high inflation increases the risk that the FOMC continues to hike aggressively and triggers a recession," Kristina Clifton, an economist at Commonwealth Bank of Australia wrote in a note Thursday.
Already, two Wall Street firms are speculating that the Fed could go for a 100-basis-point rate hike this month, which Canada's central bank did on Wednesday.
Overnight in the U.S., stocks declined following the inflation report.
The Dow Jones Industrial Average dropped 208.54 points, or 0.67%, to 30,772.79, while the S&P 500 slid 0.45% to 3,801.78. The Nasdaq Composite fell 0.15% to close at 11,247.58.
The yield curve inversion in U.S. Treasury, seen as a recession signal, widened on Wednesday stateside. The 2-year yield last stood at 3.2151%, higher than 2.9799% for the 10-year note. Yields move inversely to prices.
Taiwan's chipmaker TSMC reported a 76.4% increase in net profit in the second quarter. Revenue also jumped 36.6% compared to a year ago. The company's stock rose about 1% on Thursday.
Japan's Fast Retailing's net profit for the nine months ending May 31, 2022 grew 57.1%, Reuters reported.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, briefly slipped below 108, but was last at 108.476.
The Japanese yen weakened to 139.21 per dollar, and the Australian dollar changed hands at $0.6757.
Oil futures declined in Asia's afternoon trade after rising in the morning. U.S. crude slipped 1.47% to $94.88 per barrel, while Brent crude was 1.24% lower at $98.34 per barrel.
— CNBC's Jeff Cox and Yun Li contributed to this report.