HONG KONG — Asian stocks showed positive momentum on Wednesday, as investors await the Federal Reserve’s final rate decision for the year. U.S. futures increased while oil prices demonstrated a mixed performance.
Japan’s benchmark Nikkei 225 experienced a slight decline of 0.2%, trading at 39,281.06, following a report that revealed the nation’s exports grew 3.8% year-on-year in November, while imports fell by 3.8%, according to the Ministry of Finance.
In a notable market event, shares of Nissan Motor Corp. were temporarily suspended after a dramatic 22% surge amid speculation of a potential merger with Honda Motor Co. Honda’s shares fell by as much as 3% in response. The two automakers confirmed that they are exploring closer collaboration but have not finalized any decisions yet. Earlier in August, Nissan, Honda, and Mitsubishi Motors Corporation agreed to share components for electric vehicles and jointly develop autonomous driving software to remain competitive in a rapidly evolving industry.
The Japanese yen weakened ahead of the Bank of Japan’s anticipated policy update on Friday, where it is expected to maintain its benchmark rate unchanged.
In broader market activity, Hong Kong’s Hang Seng index rose by 0.6% to 19,815.30, and the Shanghai Composite index climbed 0.7% to 3,385.64. South Korea’s Kospi gained 1% to reach 2,481.87, while Australia’s S&P/ASX 200 saw a marginal decline of 0.1% to 8,304.00.
On the U.S. front, the S&P 500 dipped by 0.4% to 6,050.61 on Tuesday, despite remaining near record highs. The Dow Jones Industrial Average fell by 0.6% to 43,449.90, while the Nasdaq composite decreased by 0.3% to 20,109.06 from a record high set the previous day.
A recent survey by strategists highlighted a strong appetite among global fund managers for U.S. stocks, with many managers reducing cash reserves to invest. This trend parallels conditions observed prior to the market downturns in 2002 and 2011.
The S&P 500 is on track to achieve one of its best annual performances since 2000, increasing nearly 27% as a result of the U.S. economy’s surprising resilience, optimism regarding upcoming policies, and a series of interest rate cuts by the Federal Reserve.
The Federal Reserve is widely anticipated to announce its third interest rate cut of the year on Wednesday while providing projections for future rate movements. However, expectations for further rate cuts are shifting as inflation data indicates a persistent rise above the Fed’s target of 2%.
Recent reports show an unexpected boost in U.S. retail sales for the previous month, suggesting that the economy may not require further assistance from lowered interest rates. Financial experts caution that while lower rates could stimulate growth, they may also exacerbate inflation.
“While the Fed is poised to cut rates Wednesday, robust economic data could raise the likelihood of a pause in January,” an industry analyst noted.
Treasury yield rates remained stable following the economic report, with the 10-year Treasury yield at 4.40%, and the two-year yield dipped slightly to 4.24%.
In cryptocurrency news, Bitcoin reached a record high above $108,000 before retracting to approximately $106,500, propelled by favorable sentiment toward digital currencies following recent regulatory interests.
In energy markets, U.S. benchmark crude oil saw a slight rise of 7 cents to $69.72 per barrel, while Brent crude climbed 6 cents to $73.25 per barrel.
The U.S. dollar experienced a minor decline against the Japanese yen, trading at 153.47, and the euro strengthened to $1.0505, up from $1.0491.
