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Nikkei Markets

Asian stocks edge higher ahead of Fed meeting minutes

China Vanke, automakers among key movers

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan edged higher on Wednesday ahead of the release of the Federal Reserve's latest meeting minutes that could offer insights into the outlook for the U.S. monetary policy.

The Nikkei Asia300 Index of rose 0.1% to close at 1,235.24.

The gains in Asian equities came ahead of the minutes of last month's Fed meeting. The minutes, due later in the day, will throw more light into the Fed's decision to cut rates and whether more rate cuts would be forthcoming. Traders will receive more information on the outlook for U.S. rates later this week when Fed Chair Jerome Powell speaks at a central bank symposium at Jackson Hole on Friday.

The likelihood of more interest rate cuts by the Fed has increased in recent days amid mounting worries over the economic outlook. Last week, a closely watched portion of the Treasury yield curve inverted, indicating that growth could decelerate in the coming quarters.

Powell, in July's post policy press conference, characterized the rate reduction a "mid-cycle adjustment," which was taken to indicate that a prolonged rate -cutting cycle was unlikely. In the wake of the heightened growth worries, traders will be watching if the Fed chief changes his tone.

"The Fed minutes are really the appetizer for the Friday Jerome Powell Show at Jackson Hole," ING Bank said. Discussions of last month's cut being a mid-cycle adjustment might cause "cognitive dissonance for investors" with the pricing of almost two more cuts by the middle of next year, it added.

Meanwhile, President Donald Trump reportedly said that he "had to take China on" even if it meant that it hurt the U.S. economy in the short term. Trump said that "China has been ripping" U.S. for 25 years, and it was time that "something had to be done."

Shares of Chinese companies were not much affected by Trump's comments. An index of Chinese companies listed in Hong Kong closed 0.4% higher. China Vanke advanced 1.4% after the real-estate developer reported a 30% year-on-year increase in first-half net profit and a 33% increase in revenue. Vanke's peer China Overseas Land & Investment added 1%.

Chinese social media major Tencent Holdings edged 0.2% lower and China Construction Bank climbed 0.7%.

Bank of East Asia closed 1.7% lower after the Hong Kong lender reported a 75% decline in first-half net profit.

Bourse operator Hong Kong Exchanges & Clearing climbed 0.8%. U.S.-listed Chinese e-commerce major Alibaba Group Holding is postponing its Hong Kong listing amid protests in the city, Reuters reported, citing sources.

Chinese carmakers ended mixed. Great Wall Motor rose 0.6% and Guangzhou Automobile Group fell 1.8%. Geely Automobile Holdings closed 0.5% lower following a 40% decline in net profit for the six months ended June 30.

--Nimesh Vora

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