TOKYO — Global stock markets exhibited mixed results on Wednesday as investors anticipated a significant interest rate cut by the U.S. Federal Reserve, marking the first reduction in over four years.
In Europe, France’s CAC 40 dipped 0.2% to 7,474.92, while Germany’s DAX slipped slightly by less than 0.1% to 18,723.53. Meanwhile, the UK’s FTSE 100 declined by 0.5% to 8,268.29. On the other hand, futures for the Dow Jones Industrial Average showed a 0.1% rise, and the S&P 500 futures experienced a marginal increase.
As monetary policy meetings are set for the Bank of Japan and the Bank of England later this week, analysts do not expect any changes in rates. However, the language used by officials could provide critical insights into future market movements.
Asian markets showed positive trends, with Japan’s Nikkei 225 rising 0.5% to close at 36,380.17. Australia’s S&P/ASX 200 remained relatively unchanged, inching up less than 0.1% to 8,142.10. South Korea’s Kospi increased by 0.1% to 2,575.41.
Hong Kong’s trading was paused due to a national holiday, while the Shanghai Composite index edged up 0.5% to 2,717.28.
The Federal Reserve is expected to announce its decision on interest rates later today, with widespread anticipation on Wall Street for a rate cut. The federal funds rate has been maintained within a range of 5.25% to 5.50% for over a year.
A decrease in rates is seen as a crucial move to stimulate the slowing economy, which has faced rising borrowing costs for homes, vehicles, and corporate loans.
The Fed has been keeping interest rates at their highest levels in two decades to combat persistent inflation pressures.
Meanwhile, Japan reported a trade deficit of 695 billion yen (approximately $4.9 billion) for August, a 26% decrease from the previous year, marking the second consecutive month of deficits, according to the Finance Ministry.
Japan’s exports reached 8.4 trillion yen ($59 billion), reflecting a year-on-year increase of 5.6%, with notable rises in shipments to Asia, albeit a decline in exports to the U.S. Imports were recorded at 9.1 trillion yen ($64 billion), up 2.3% from the previous year; imports from Europe showed significant gains in categories like pharmaceuticals.
Both export and import figures fell short of anticipated growth rates of 10% and higher, respectively.
The Japanese yen has appreciated against the U.S. dollar recently, enhancing Japan’s purchasing power.
As for currency exchange, the dollar fell to 141.81 yen from 142.34 yen, after trading above 150 yen earlier this year.
The euro was priced at $1.1131, an increase from $1.1117.
In the energy sector, U.S. crude oil prices dropped by 86 cents, settling at $70.33 a barrel, while Brent crude, the global benchmark, fell by 82 cents to $72.88 a barrel.
