MSCI’s broadest index of Asia-Pacific shares outside Japan was last trading flat, while US S&P 500 e-mini futures edged 0.1% higher after stocks on Wall Street posted a slim loss to snap a four-day winning streak.
Global markets are in the midst of a string of central bank decisions that will give clues about the path ahead for interest rates as US President Trump’s administration imposes blanket tariffs on foreign imports.
Trump is due to meet Chinese leader Xi Jinping in South Korea later today. US negotiators have signalled they seek a return to a fragile trade war truce, but tensions remain high and longer-term economic irritants will likely persist between the geopolitical rivals.
“After a fair bit of action in the first couple days of this week, we’ll probably finish the central banking story with a bit of a whimper in the next 24 hours, with probably not much happening either from the BOJ or the ECB,” said Sally Auld, chief economist at National Australia Bank in Sydney in a podcast.
The Nikkei 225 opened 0.1% lower, ahead of a decision from the Bank of Japan later today at which the central bank is widely expected to keep interest rates steady.
Against the yen, the US dollar was last unchanged at 152.70 yen after remarks by US treasury secretary Scott Bessent calling for speedier rate hikes to avoid weakening the currency too much, which analysts said may affect the BOJ’s communication on the future pace of rate hikes.
The Federal Reserve cut interest rates on Wednesday by a quarter of a percentage point as expected, but the US central bank’s new policy statement included several references to the lack of official data during the ongoing federal government shutdown, and Fed chair Jerome Powell told reporters later that policymakers are likely to become more cautious if it deprives them of further job and inflation reports.
Traders have slashed their forecasts of a 25-basis-point rate cut next month, which had been viewed as a near-certainty earlier. Fed funds futures now imply a 67.8% probability that the Fed will hold rates at its next meeting on Dec 10, compared with a 9.1% chance yesterday, according to the CME Group’s FedWatch tool.
The yield on the US 10-year Treasury bond was last trading around a three-week high of 4.0757%, up 1.77 basis points compared with a previous close of 4.058%.
The dollar index, which measures the greenback’s strength against a basket of six currencies, climbed to a two-week high of 99.131. Gold was last up 0.4% at US$3,944.25 per ounce.
The euro was last unchanged at US$1.16035 ahead of a policy decision by the European Central Bank later in the day at which it is expected to leave rates on hold for a third meeting in a row.
Elsewhere, corporate earnings season is fuelling fresh anxiety among investors over the cost of the AI buildout, even as the U.S. economy appears to remain in rude health, putting pressure on tech megacap stocks that account for the biggest weighting in the S&P 500 Index.
Meta on Wednesday forecast “notably larger” capital expenses next year as its revenues beat market estimates, while Microsoft’s spending on artificial intelligence infrastructure soared to a record of nearly US$35 billion in the September quarter. Shares of both companies slumped.
However, rival tech giant and Google parent Alphabet bucked the trend, with shares rising in after-hours trading after it beat revenue expectations.
In energy markets, Brent crude was last unchanged at US$64.92 per barrel.