Asian equities rose Thursday, led by technology shares in Japan and Taiwan, as investors priced a wider range of outcomes for next week’s Federal Reserve meeting and waited for fresh U.S. inflation data.
The risk-on tone in stocks contrasted with a hesitant bond market, where recent rallies paused and yields seesawed in thin Asia hours.
Japan’s Nikkei and Taiwan’s main index hovered near records, reflecting momentum in AI-linked names.
Futures tied to the policy rate continue to favor a quarter-point reduction, yet they now reflect a meaningful, if still secondary, probability of a 50 basis point cut, equal to half a percentage point, according to CME FedWatch.
That shift follows softer U.S. wholesale inflation and a run of weaker growth signals.
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Official data showed producer prices edged down 0.1% in August, with services weaker, an update that bolstered the case for easier policy.
Over 12 months, final demand rose 2.6%, while an index excluding food, energy and trade services advanced 2.8%. Those readings mark a moderation from midyear and align with a broader downtrend in inflation since 2023.
Global bonds were mixed after a multi-day Treasury rally that pulled the 10-year yield toward the low 4% area into Wednesday’s close, per the Federal Reserve’s H.15 series and FRED.
Moves in Australia and New Zealand largely tracked that consolidation, while liquidity was thin ahead of a U.S. 30-year auction and currency markets were subdued.
The Bureau of Labor Statistics is slated to release August CPI at 8:30 a.m. ET on Thursday. A cooler core print would reinforce expectations for a September cut, while an upside surprise could keep the Fed on a more cautious path.
