Asian Stocks Fall as Markets Await Key U.S. Data, Fed Cut Bets Fade

Asian stocks slipped on Tuesday as investors awaited a backlog of major U.S. economic data delayed by the government shutdown, while expectations for a December Federal Reserve rate cut continued to ease.

MSCI’s Asia-Pacific ex-Japan index fell 0.7%, and Japan’s Nikkei dropped over 2%, following Wall Street’s extended selloff overnight.

Markets are focused on Thursday’s U.S. nonfarm payrolls report, which is expected to offer crucial insight into the health of the U.S. economy. Fed cut odds for December have fallen to around 40% from over 60% earlier this month.

Attention in the region also turned to Japan, where new Prime Minister Sanae Takaichi met BOJ Governor Kazuo Ueda for the first time. Ueda has hinted at a possible rate hike next month, while Takaichi prefers keeping rates low until inflation meets the 2% target.

In currencies, the U.S. dollar index rose 0.2%, hitting a one-week high, while the yen weakened to 155.29, its softest level since February.

Gold eased 0.3% to $4,030, Brent crude slipped 0.5% to $63.91, and Bitcoin edged up 0.3% after touching a seven-month low.