Nikkei and KOSPI Both Hit All-Time Highs as the Fed Rocks Wall Street

Japan’s Nikkei 225 and South Korea’s KOSPI both hit all-time highs on June 18 as Asia shrugged off Wall Street’s worst Federal Reserve day under a new Fed chair since 1994. Kevin Warsh held rates steady at his debut meeting, but his committee’s updated forecasts sent a very different message.

The Federal Reserve left its benchmark rate in a range of 3.5% to 3.75%. But the updated dot plot, the Fed’s chart showing where each official expects interest rates to end up, showed the median year-end projection rising to 3.8%, up from 3.4% in March.

Nikkei and KOSPI Both Set Records

Asian markets opened Thursday on a different footing. Japan’s Nikkei 225 crossed 71,000 for the first time in the index’s history, while the broader Topix also rose. South Korea’s KOSPI also climbed to a record of its own, with SK Hynix jumping 3.45% after the company shipped samples of its next-generation AI memory chip, HBM4E, to key customers including Nvidia. Samsung Electronics added 1.23%.

Warsh’s Hawkish Turn and Crypto’s Headwind

On June 17, the S&P 500, the Nasdaq, and the Dow all dropped in stark contrast to Asian markets. All 11 sectors of the index ended lower, and the 2-year Treasury yield surged 16 basis points, or 0.16 percentage points, to 4.22%.

“The Fed held rates steady but spoiled the mood with a much more hawkish dot plot,” said Sonu Varghese, chief macro strategist at Carson Group.

Warsh also abstained from submitting his own rate forecast, leaving the committee’s direction harder to read. Nine of 18 Fed officials now project at least one hike before year-end.

For crypto, the shift carries direct weight. Bitcoin and other risk assets track global liquidity closely, and tighter monetary conditions are a headwind.

Asia is shrugging off the Fed’s signal for now. If Warsh follows through with a hike, that divergence may not last.