Stocks in Asia were mixed on Wednesday, reflecting subdued risk appetite as traders mulled the prospect of less aggressive interest rate cuts from the US Federal Reserve.
The Nikkei (^N225) slipped 0.8% on the day in Japan, while the Hang Seng (^HSI) climbed 1.3% in Hong Kong.
The Shanghai Composite (000001.SS) was 0.5% up by the end of the session after a top government-linked think tank called on authorities to issue 2 trillion yuan ($281bn) of special government bonds to help create a market stabilisation fund.
Across the pond on Wall Street, the S&P 500 (^GSPC) fell 0.05% to 5,851.20, and the tech-heavy Nasdaq (^IXIC) was 0.2% higher, ending at 18,573.13. The Dow Jones (^DJI) ended little changed, down just 0.02% to 42,924.89.
The lacklustre performance comes as investors have pared back bets on rapid policy easing as the US economy remains robust and concerns rise about wider fiscal deficits after the presidential election.
Since the end of last week, traders have trimmed the extent of expected Fed cuts through September 2025 by more than 10 basis points.
In currency markets, the dollar was steady in Asia after the euro hit the lowest since early August amid bets the European Central Bank (ECB) will keep lowering interest rates.
Meanwhile, Japan’s 40-year government bond yield climbed to its highest level in 16 years amid growing speculation that the nation’s central bank will push ahead with interest rate increases in coming months.
Treasury 10-year yields hovered near 4.2% after topping that level for the first time since July. US Treasury yields have risen since the start of the week amid market uncertainty ahead of the US election as well as the outlook on interest rate cuts.
The yield of 10-year US notes rose to 4.214% yesterday from 4.212% late on Monday and 4.096% late on Friday.
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