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Asian stock markets delivered a mixed performance on Wednesday as investors waited for an expected US interest rate cut later in the day.
Traders paused after a weeks-long global rally pushed several indexes to record highs, focusing instead on the Federal Reserve’s decision and comments from its chair, Jerome Powell.
Markets have already priced in a 25-basis-point reduction — the first of 2025 — but debate continues over how many more cuts will follow and their size.
Expectations for a longer easing cycle have grown after data showed the US labour market was weaker than previously thought. This comes despite inflation remaining stubbornly above the Fed’s 2% target. Fears of a tariff-driven inflation surge under US President Donald Trump have yet to materialise.
Economists expect divisions within the Fed as policymakers balance the risks of inflation against a slowing jobs market. “That’s not a good place to be,” said Diane Swonk, chief economist at KPMG, warning of stagflation — sluggish growth with rising prices.
Tuesday’s strong US retail sales data did little to reduce optimism for rate cuts, though Asian traders traded cautiously after a muted Wall Street session.
Tokyo, Hong Kong, Manila and Jakarta gained ground, while Seoul, Shanghai, Sydney, Singapore, Wellington and Taipei fell back. “Markets remain in somewhat of a holding pattern ahead of the Federal Reserve’s decision tonight,” noted Josh Gilbert of eToro.
Gold prices hovered just below their record high above $3,700, with lower rates boosting its appeal.
Meanwhile, fresh data showed Japan’s exports to the United States plunged nearly 14% in August — the sharpest fall since 2021 — driven by a 28% collapse in auto shipments, a key pillar of its economy.
Key figures at 0230 GMT
- Tokyo – Nikkei 225: UP 0.2% at 44,995.79 (break)
- Hong Kong – Hang Seng Index: UP 0.7% at 26,619.45
- Shanghai – Composite: DOWN 0.1% at 3,858.98
- Euro/dollar: DOWN at $1.1857 from $1.1868
- Pound/dollar: DOWN at $1.3643 from $1.3657
- Dollar/yen: UP at 146.52 from 146.49
- Euro/pound: UP at 86.90 pence from 86.87 pence
- WTI: DOWN 0.1% at $64.46 per barrel
- Brent: DOWN 0.1% at $68.40 per barrel
- New York – Dow: DOWN 0.3% at 45,757.90 (close)
- London – FTSE 100: DOWN 0.9% at 9,195.66 (close)
