Array
Hong Kong, China — Most Asian markets rose Tuesday but Tokyo sank more than one percent as exporters were hit by a stronger yen with traders gearing up for a bumper US interest rate cut and a key Japanese central bank meeting.
Bets on the Federal Reserve slashing borrowing costs by as much as half a percentage point have jumped in recent days, with observers suggesting officials want to front-load an expected series of reductions.
That has weighed on the dollar, which sank below 140 yen Monday for the first time since summer 2023 and also weakened against its other major peers.
A string of data in the past few months have indicated that US inflation is easing back to the Fed’s two percent target, while the labour market is slowing, giving decision-makers room to loosen monetary policy.
Bank boss Jerome Powell has already suggested officials will begin cutting, but debate has focused on whether they will go for 25 basis points or 50, with some warning that the bigger option could signal there is some concern about the economy.
Successive big misses on jobs creation in July and August fanned fears of a recession, though policymakers have looked to temper that talk.
And independent analyst Stephen Innes said: “The labour market and inflation data haven’t exactly screamed for a massive cut, but that hasn’t stopped the market from placing its bets.
