China's PMI Contracts; Fed Rate Hike Looms

Asia markets were mixed on Friday as investors digested weak PMI data from China and awaited the Federal Reserve's decision on interest rates. The Caixin/Markit manufacturing PMI for China came in at 49.1, indicating a contraction in the sector and raising concerns about the country's economic outlook.

The weak PMI data from China weighed on regional markets, with the Shanghai Composite Index falling by 0.5% and the Hang Seng Index in Hong Kong declining by 0.3%. However, the Nikkei 225 in Japan bucked the trend, rising by 0.4% on the back of a weaker yen.

Investors are now focusing on the Federal Reserve's decision on interest rates, which is expected to be announced later in the day. The Fed is widely expected to raise rates by 25 basis points, but investors will be paying close attention to the central bank's forward guidance on future rate hikes.

The Fed's decision will have implications for global markets, including Asia. A hawkish stance from the Fed could lead to a strengthening of the US dollar and a sell-off in emerging market currencies, including those in Asia. Conversely, a dovish stance could lead to a rally in risk assets, including stocks and commodities.

In addition to the Fed's decision, investors will also be keeping an eye on the US non-farm payrolls report, which is due to be released on Friday. The report is expected to show that the US economy added 185,000 jobs in January, down from 223,000 in December.

The US dollar index was little changed on Friday, trading at 102.75. The yield on the 10-year US Treasury note was at 3.95%. Gold was down 0.2% at $1,825.50 an ounce, while oil was up 0.5% at $79.50 a barrel.