Asian Markets Sway Amid Fed Rate Expectations

Asian stocks experienced a downturn as a strong dollar kept the yen near six-month lows, with traders anticipating a slow rate cut from the Federal Reserve. Key indices in Japan, China, and Hong Kong fell alongside Wall Street's major indexes, reflecting inflation worries. Investor focus remains on U.S. economic policy.

Asian stock markets took a dip on Wednesday due to the strength of the dollar, which held the yen near six-month lows. Traders' expectation that the Federal Reserve will be slow in reducing rates, given stable U.S. economic and labor data, influenced market sentiments.

The MSCI's broad index for Asia-Pacific shares, excluding Japan, dropped 0.2%, while Japan's Nikkei fell by 0.8%. This mirrored a decline on Wall Street, where all primary indexes decreased, sparked by inflation concerns. China's blue-chip CSI300 Index fell 0.3% and Hong Kong's Hang Seng Index was down 0.55% during early trading.

With the yen trading at 157.98 per dollar, the focus remains on the U.S. Federal Reserve's interest rate path and upcoming economic data, particularly in light of impending policy discussions. The Fed projects two rate cuts for 2025, and a significant upcoming payroll report awaits investors' analysis.

(With inputs from agencies.)