Asia Markets Follow Wall Street Records As Powell Boosts Rate Expectations; Mixed Performance On China and Japan Service Sector

Asian stocks rose on Wednesday, buoyed by new records on Wall Street after Federal Reserve Chairman Jerome Powell fueled hopes of an interest rate cut. 

Powell noted progress in the battle against inflation and a cooling job market, sparking optimism that a reduction in rates, possibly two, could occur before the year’s end. This comes after a period of above-forecast data and central bank warnings indicating that monetary policy would stay elevated for some time. 

Japan’s Nikkei 225 climbed 1.3% closing at 40,580.76. Among technology-related stocks in Tokyo, Kyocera Corp. advanced 3.1% while Murata Manufacturing Co. soared 6.4%.

Significant gains on the benchmark index included Taiyo Yuden, which rose 7.14% Dainippon Screen Manufacturing, which increased by 6.82%, and Mitsubishi Heavy Industries, which advanced by 6.48%

According to IG market analyst Yeap Jun Rong, Japan’s Nikkei is on the radar and could extend its gains above the 40,000 level, supported by overnight strength in tech stocks and the Japanese yen trading at a 38-year low. The US dollar rose to 161.83 Japanese yen, up from 161.44 yen late yesterday. 

Hong Kong’s Hang Seng Index also increased by 1.2% to 17,978.57, with Li Auto, Sands China, and Meituan leading the gains. On the other hand, the Shanghai Composite index declined by 0.5% to 2,982.38. Guangdong Champion Asia Electronics slipped by 10.01%, Gan & Lee Pharmaceuticals fell 8.13%, and Guangzhou Guangri Stock Co. dropped 7.84%. 

Meanwhile, Australia’s S&P/ASX 200 rose nearly 0.3% to 7,739.90, while South Korea’s Kospi increased by 0.5% to 2,794.01.