Wed Sep 18 02:27:17 UTC 2024: ## Asian Markets Seesaw as Fed Rate Cut Looms

**Tokyo, September 19, 2024** – Asian markets swung between gains and losses on Wednesday as investors anticipated the Federal Reserve’s interest rate decision later in the day. While a rate cut is widely expected, uncertainty remains regarding the magnitude of the reduction, with some analysts predicting a significant decrease while others anticipate a more gradual approach.

The prospect of easier monetary policy has fueled market gains this year, with several major indexes hitting record highs. However, with prices elevated and a period of rate cuts already factored in, experts warn of potential market volatility moving forward.

The dollar strengthened against the yen, boosted by upbeat US economic data that revealed consumer spending cooled in August but not as drastically as predicted, suggesting a resilient economy. This also helped alleviate concerns about a possible recession in the US.

While the Fed’s decision and subsequent statement from Chairman Jerome Powell will be closely scrutinized, market watchers are divided on the impact of a large rate cut. Some believe it could signal concerns about the economy, while others argue that a smaller cut might indicate the Fed is lagging behind on easing policy.

“Our economists have made the case for a 25-basis-point cut, noting that while the labor market evolution could readily support a 50-basis point move to kick off the long-awaited cutting cycle… officials have not made that case, and the data is not emphatic enough to force their hand,” stated Rodrigo Catril of National Australia Bank.

Despite this, media reports have suggested a 50-point cut is still under consideration, leading traders to believe there is a 70% chance of such a move.

Asian markets reflected this uncertainty. Tokyo rose as a weaker yen benefited exporters, while Shanghai gained following a four-day holiday break. However, Sydney, Wellington, and Taipei experienced losses, with Manila trading flat. Hong Kong and Seoul were closed for holidays.

Following the Fed’s decision, attention will shift to the Bank of Japan, which is scheduled to announce its own policy decision on Friday. It is expected to maintain its current stance, having hiked interest rates twice this year, marking the first increase in 17 years.

**Key Market Movements:**

* **Tokyo – Nikkei 225:** UP 0.7% at 36,462.28
* **Shanghai – Composite:** UP 0.1% at 2707.64
* **Dollar/yen:** UP at 141.67 yen from 141.22 yen on Tuesday
* **West Texas Intermediate:** DOWN 0.3% at $70.96 per barrel
* **Brent North Sea Crude:** DOWN 0.2% at $73.52 per barrel
* **New York – Dow:** FLAT at 41,606.18 (close)
* **London – FTSE 100:** UP 0.4% at 8,309.86 (close)

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