Asian Markets Mostly Steady as Fed Rate Cut Speculation Drives Sentiment; Japan Surges
Asian stock markets were largely steady on Thursday, following modest gains on Wall Street, while Japanese equities saw a notable rise driven by technology and semiconductor sectors.
Overnight, major U.S. indices posted small advances, and futures linked to those benchmarks held mostly flat during early Asian trading hours.
Fed Rate Cut Expectations Support Markets
Investor sentiment was boosted by strong expectations that the Federal Reserve may lower interest rates next week, after recent U.S. economic data came in weaker than anticipated. The ADP private payrolls report highlighted a slowdown in job creation, and the ISM services index suggested a softer pace in the service sector.
According to the CME FedWatch tool, traders are assigning roughly a 90% probability to a 25-basis-point rate cut on December 10. Attention now turns to Friday’s personal consumption expenditures (PCE) inflation data, which could further shape expectations for U.S. monetary policy.
Japan Outperforms
While most regional markets remained subdued, Japanese stocks bucked the trend. The Nikkei 225 and TOPIX climbed 1.6%, led by gains in technology and semiconductor firms.
Other Asian markets showed more muted moves as investors weighed regional economic indicators and geopolitical developments that could influence risk appetite.
Uncertainty around U.S. fiscal policy and upcoming leadership changes at the Fed added to the cautious mood. With some key economic data delayed due to prior government shutdown disruptions, market participants are taking a wait-and-see approach.
In China, the blue-chip Shanghai Shenzhen CSI 300 rose 0.3%, while the Shanghai Composite index remained largely unchanged. Hong Kong’s Hang Seng inched up 0.2%, and India’s Nifty 50 gained 0.3%.
On the downside, South Korea’s KOSPI dropped 0.6%, and Singapore’s Straits Times Index declined 0.2%.
Australia Reports Trade Balance
In Australia, the October trade balance showed a slightly smaller-than-expected surplus as exports slowed due to weak international demand for key commodities. The S&P/ASX 200 edged up 0.2%.
