Hopes of a Fed Rate Cut Lift the Yen & Buoy Shares – Asia Market Wrap

A barometer of Asia-Pacific shares rose on Monday, boosted by expectations of a Fed policy shift, which also spurred a surge in the Yen.

Benchmarks in Taiwan and Australia rose, as did European equity futures. Meanwhile, Hong Kong stocks tumbled the most in a week after a spate of negative Chinese data left traders wondering whether the government would implement aggressive measures to support the economy. In India, shares of Bajaj Housing Finance more than doubled following the country’s largest IPO of the year.

Expectations of a decreasing interest rate disparity between the US and Japan boosted the Japanese Yen to its highest level since July 2023, while the Dollar fell. Markets in Japan, South Korea, and mainland China were closed for the holiday, and no Treasuries were traded in Asia.

The start of a long-awaited US easing cycle takes centre stage this week, as part of a 36-hour monetary roller coaster that includes policy announcements in Brazil, South Africa, the UK, and Japan. While traders debate whether the Fed will lower rates by 25 or 50 basis points, the BoJ is expected to keep rates unchanged after raising rates at its most recent meeting, which shook global financial markets.