FX.co ★ Asian Shares Mixed Amid China-Taiwan Tensions

Asian stocks displayed mixed outcomes at the close of Thursday's session amidst ongoing concerns about interest rates and following China's announcement of immediate military drills around Taiwan, an alarming escalation of the long-standing tensions between Taipei and Beijing.

Hawkish minutes from the Federal Reserve's recent policy meeting bolstered the dollar, which hovered near a one-week high after experiencing its most substantial gain this month against major currencies.

Gold prices retreated further from their record highs after the Fed minutes suggested potential additional interest rate hikes if inflation remains persistent.

Oil prices dropped for the fourth consecutive session due to bearish inventory data and ongoing concerns about prolonged high U.S. interest rates.

In China, the Shanghai Composite Index declined by 1.33%, settling at 3,116.39, while Hong Kong's Hang Seng Index plummeted 1.7% to finish at 18,868.71.

Japanese markets, conversely, saw gains, spurred by strong financial results from U.S. tech giant Nvidia, which lifted technology stocks. The Nikkei average rose by 1.26% to 39,103.22, reaching a one-month high, while the broader Topix index increased by 0.64% to 2,754.75. Notable performers included Advantest, which surged 5.4%, SoftBank Corp, up 4.3%, and Tokyo Electron, gaining 1.8%.

Seoul's stocks recovered from early losses to close flat. The Kospi average ended marginally lower at 2,721.81 as the Bank of Korea maintained its key policy rate amid persistent inflation and upgraded its 2024 GDP growth forecast.

Australian markets closed with losses as rate concerns prompted investors to take profits in commodity-related stocks. However, information technology stocks outperformed, with Xero soaring 8.7% following better-than-expected FY24 profit reports. The benchmark S&P ASX 200 declined by 0.46% to 7,811.80, and the broader All Ordinaries index fell by 0.43% to 8,083.10.

In New Zealand, the benchmark S&P NZX-50 index rose by 0.66% to 11,809.48, bolstered by stronger-than-expected retail sales data for the first quarter.

U.S. stocks struggled to find direction before closing lower overnight, following the release of minutes from the April 30-May 1 Fed meeting. These minutes revealed officials' disappointment with recent inflation data and discussions of potential further rate hikes if inflation persists. Reflecting the economy's resilience, officials predicted that "disinflation would likely take longer than previously thought."

Mixed quarterly results from retailer Target further fueled concerns about the durability of U.S. consumer spending. The Dow Jones Industrial Average declined by 0.5%, the S&P 500 slipped 0.3%, and the tech-heavy Nasdaq Composite decreased by 0.2%.