Asian Stocks Fluctuate With Focus On Fed Meeting: Markets Wrap

Asian shares struggled for direction after Wall Street edged lower, with traders bracing for the Federal Reserve’s final policy decision of the year.

Equities slipped in Japan in early trade while those in South Korea and Australia rose. Futures point to gains in Hong Kong. US contracts were slightly lower after the S&P 500 and Nasdaq 100 both shed 0.4% Tuesday. Honda Motor Corp.’s shares dropped while Nissan Motor Co.’s remain untraded after news that the two firms are exploring a potential merger.

Bloomberg’s dollar gauge was steady. The yen weakened a tad ahead of the Bank of Japan’s policy decision Thursday. Treasuries were steady in Asia.

In the US, retail sales increased at a firm pace in November, highlighting consumer resilience, although industrial production unexpectedly declined for a third month. Traders are now turning to the Fed decision, with a quarter-point cut widely expected, but less clarity over what happens in the following months as the prospect of inflationary import tariffs proposed by the incoming administration may give Fed officials pause about the pace of further moves.

Bank of America Corp. sees the Fed lowering interest rates to the 3.75% level — or three more cuts from where they are currently, Chief Executive Officer Brian Moynihan said on Bloomberg Television.

“They need to bring it down a little bit, they just have to be more careful because the economy is stronger than we thought three months ago, six months ago but still has potential weaknesses” he said. “We haven’t even talked about what is going on outside the United States that could affect it — not tariffs but wars.”

Oil edged higher after a two-day drop. Gold was flat. 

Elsewhere in the currency markets, the Canadian dollar slid to its lowest level since March 2020. Brazil took extraordinary measures to stem a collapse in the real, selling over $3 billion in local markets. 

In the corporate world, memory-chip maker Kioxia Holdings Corp. rose in its debut on the Tokyo Stock Exchange on Wednesday, underscoring decent investor demand for new shares in Japan. 

Key events this week: 

• UK CPI, Wednesday

• Eurozone CPI, Wednesday

• US rate decision, Wednesday

• Japan rate decision, Thursday

• UK BOE rate decision

• US revised GDP, Thursday

• Japan CPI, Friday

• China loan prime rates, Friday

• Eurozone consumer confidence, Friday

• US personal income, spending & PCE inflation, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 8:56 a.m. Tokyo time

• Hang Seng futures rose 0.6%

• Australia’s S&P/ASX 200 rose 0.1%

• Nasdaq 100 futures fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0495

• The Japanese yen was little changed at 153.56 per dollar

• The offshore yuan was little changed at 7.2873 per dollar

• The Australian dollar was little changed at $0.6338

Cryptocurrencies

• Bitcoin fell 0.3% to $106,079.4

• Ether fell 1.3% to $3,881.69

Bonds

• The yield on 10-year Treasuries was little changed at 4.40%

• Australia’s 10-year yield was little changed at 4.30%

Commodities

• West Texas Intermediate crude rose 0.1% to $70.17 a barrel

• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.