(Bloomberg) — Stocks in Asia rose for a fourth day, serving as a contrast to the US where a selloff continued. Gold traded near a fresh record.
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Shares in Japan and South Korea rose, while China’s slipped and Hong Kong’s fluctuated. Contracts for US stocks advanced after benchmarks slid on Tuesday. Investors have slashed holdings of US equities by the most on record while cash levels jumped, according to Bank of America Corp.’s latest survey.
Uncertainty over President Donald Trump’s economic policies, particularly around trade and tariffs, has spurred fears of a recession, with traders seeking clarity from the Federal Reserve policy decision later Wednesday. Investors have also been hunting for opportunities elsewhere, with benchmarks in China and Japan rallying in recent weeks.
“It’s a case of ‘no news is good news’ for traders when it comes to tariffs,” said Tim Waterer, chief market analyst at KCM Trade in Sydney. “Having said that, there will be some underlying nerves about how the upcoming reciprocal tariffs will impact exporters across Asia.”
The yen erased losses after the Bank of Japan held rates steady, as expected. The BOJ said it sees a virtuous income-spending cycle.
Japan’s wages need to rise by at least 3% over the next two years to achieve the central bank’s sustainable inflation target, according to economists at Goldman Sachs.
Separately, Japan’s exports rose at a faster pace as businesses increased orders ahead of the rollout of higher tariffs in the US. Elsewhere in Asia, Chinese banks are slashing rates on consumer loans to record lows as policymakers ramp up stimulus to stabilize growth and counter US President Donald Trump’s tariffs.
Investors continue to monitor market turmoil in Indonesia, where mass selloffs triggered circuit breakers and trading halts on Tuesday. The benchmark Jakarta Composite Index was mixed in early trading Wednesday.
Shares of Xpeng Inc. declined as its volume guidance came in short of some analyst expectations, while tech firm Xiaomi Corp. fluctuated in Hong Kong after reporting its fastest revenue growth since 2021 on electric vehicles.
Earnings are expected later from the likes of Tencent Holdings Ltd., Anta Sports Products Ltd. and Muyuan Foods Co.
In commodities, oil slipped as broader market weakness and concerns about a global glut of crude overshadowed escalating tensions in the Middle East. Meanwhile, gold pulled back from a record high above $3,030 an ounce.
Dot Plot
The Fed is expected to hold interest rates steady and its quarterly dot plot should give investors more insight into the outlook for the economy. Traders will also be focused on Fed Chair Jerome Powell’s press conference and his juggling act between communicating the central bank’s current view of the economy and weighing the potential impact of Trump’s trade policy.
“Amidst a deteriorating economic backdrop caused by tariffs and general trade uncertainty, the markets are looking for the proverbial ‘Powell put,’ hopefully expressed in dovish guidance and a lowered dot plot in the updated Summary of Economic Projections, said Kyle Rodda, a senior market analyst at Capital.com.
Treasury yields rose. The greenback steadied.
Uncertainty over geopolitics and the Fed’s interest-rate decision overshadowed better-than-expected factory output data that eased concern of weakening manufacturing. Other data released Tuesday showed a rebound in US home construction.
Traders’ concerns showed as the S&P 500 fell 1.1% on Tuesday while the Nasdaq 100 slid 1.7%. Nvidia Corp. sank 3.4% despite laying out plans to expand its AI reign with robots and desktop systems, Tesla Inc. dropped 5.3% and Meta Platforms Inc. became the last of the Magnificent Seven stocks to lose its year-to-date gain.
Options traders are pricing in a 1.2% move in the S&P 500 in either direction on Wednesday — up from an average of 0.8% for Fed days over the past year, according to data from Stuart Kaiser, Citigroup’s head of US equity trading strategy.
“Historically, Fed days when rates have been left unchanged have tended to see solid gains,” Bespoke Investment Group strategists said.
Key events this week:
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Federal Reserve rate decision, Wednesday
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China loan prime rates, Thursday
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Bank of England rate decision, Thursday
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US Philadelphia Fed factory index, jobless claims, existing home sales, Thursday
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Eurozone consumer confidence, Friday
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Fed’s John Williams speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.2% as of 11:32 a.m. Tokyo time
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Japan’s Topix rose 1.1%
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Australia’s S&P/ASX 200 fell 0.1%
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Hong Kong’s Hang Seng was little changed
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The Shanghai Composite fell 0.2%
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Euro Stoxx 50 futures rose 0.1%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0941
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The Japanese yen was little changed at 149.31 per dollar
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The offshore yuan was little changed at 7.2339 per dollar
Cryptocurrencies
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Bitcoin rose 0.8% to $82,661.51
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Ether rose 1.2% to $1,929.45
Bonds
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The yield on 10-year Treasuries was little changed at 4.29%
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Japan’s 10-year yield was unchanged at 1.510%
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Australia’s 10-year yield advanced one basis point to 4.41%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck.
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