Asian Stocks Waver Amid Anticipation of U.S. Easing Cycle

Asian stocks fluctuated while the dollar dropped amid anticipation of an easing cycle in the U.S. Japan and U.K.'s central banks are expected to hold steady. Geopolitical tension and economic data, particularly from China, add complexity. Bond yields dropped, boosting the yen and gold, while oil prices remained mixed.

Asian stocks dithered and the dollar slipped on Monday, signaling a week likely to see the start of an easing cycle in the United States. Investors are speculating on a potentially significant move by the Federal Reserve as central banks in Japan and the U.K. also convene this week, both expected to hold their positions for now.

Geopolitical factors added to the market jitters, including an alleged assassination attempt on Republican candidate Donald Trump. Stock market conditions remained thin due to holidays in China, Japan, South Korea, and Indonesia, leading to modest movements. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3% after a 0.8% bounce last week.

Economic data from China over the weekend indicated a slow-down, bolstering the call for additional economic stimulus. The Federal Reserve's potential aggressive easing move saw bonds rally, pushing two-year Treasury yields to their lowest close since September 2022. Meanwhile, the yen gained against the dollar, and gold prices approached an all-time peak.

(With inputs from agencies.)