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Asian Markets Mixed After Fed Meeting; China, U.S. Impose New Tariffs

Asian markets were mixed in afternoon trade - Asian markets were mixed in afternoon trade on Thursday, with Australia’s stocks underperforming as Prime Minister Malcolm Turnbull’s leadership appeared to be in question after three senior ministers tendered their resignations and called for a second leadership vote.

The Federal Reserve said the central bank is ready to raise rates again as long as the U.S. economy remains healthy. “Many participants suggested that if incoming data continued to support their current economic outlook, it would likely soon be appropriate to take another step in removing policy accommodation,” minutes of the July 31-Aug. 1 Federal Open Market Committee meeting released Wednesday in Washington said.

The minutes also noted “further gradual increases” in their target rate “would be consistent with a sustained expansion of economic activity, strong labor market conditions and inflation near the committee’s symmetric 2 percent objective over the medium term.”

In Asia, China’s Shanghai Composite and the Shenzhen Component gained 0.2% and 0.4% respectively by 1:45AM ET (05:45 GMT) as traders look to the lower-level trade talks between Beijing and Washington. U.S. President Donald Trump has said he did not expect much to happen during the meeting. Reports citing people familiar with the matter said the talks are predicted only to result in a joint statement of productive discussions.

The new U.S. tariffs on $16 billion of Chinese imports are set to take effect later in the day, while China said it would impose retaliatory tariffs on the same amount of U.S. goods.

Telecom giant Huawei Technologies received some focus as Australia’s government banned the company from supplying equipment for its planned 5G network as the government cited risk of foreign interference.

The ASX slipped 0.2% after Finance Minister Mathias Cormann resigned and said he believes former Home Affairs Minister Peter Dutton is the best person to lead the government. "I can't ignore reality," Cormann said. "I can't ignore the fact that a majority of colleagues in the Liberal Party... are of the view that there should be a change," he said.

Meanwhile, Santos Ltd (AX:STO) jumped as much as 10% earlier in the day as the company revived its dividend. Qantas Airways Ltd (AX:QAN) on the other hand lost 5% after its pre-market announcement of a record annual underlying profit.

Elsewhere, Japan’s Nikkei 225 traded 0.3% higher in morning trade. The country’s flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) rose to 52.5 in August on a seasonally adjusted basis from a final 52.3 in July, data on Thursday showed.

The index remained above the 50 threshold that separates expansion from contraction for the 24th consecutive month.

"August flash data extended the current growth cycle in Japan's manufacturing sector to two years, the longest uninterrupted stretch of expansion since the global financial crisis," said Joe Hayes, economist at IHS Markit, which compiles the survey.

"That said, with export orders declining, this signaled that the latest expansionary PMI reading was underpinned by strength in the domestic market."

South Korea's KOSPI and Hong Kong's Hang Seng Index were down 0.2% and 0.1% respectively.

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