Asian stocks rally to records on Fed rate-cut hopes

Asian equities surged Wednesday, tracking Wall Street’s record-setting performance, as fresh U.S. labor data bolstered expectations that the Federal Reserve will soon begin cutting interest rates.

Revised figures from the U.S. Bureau of Labor Statistics showed 911,000 fewer jobs were created in the 12 months through March than previously reported — the largest downward revision on record — reinforcing signs of a slowing economy. That followed Friday’s weak August payrolls report, adding pressure on the Fed ahead of its policy meeting next week.

Markets are now awaiting U.S. inflation data for further clues. Analysts widely expect the Fed to deliver at least a 25-basis-point cut in September, with more to follow. “The punchy revision will only accelerate the pressure on the Fed to ease in September and throughout the balance of 2025,” said Chris Weston of Pepperstone.

Asian markets extended the rally. Tokyo and Seoul closed at all-time highs, aided by optimism over potential government stimulus, while Hong Kong touched a four-year peak intraday. Gains were also seen in Sydney, Singapore, Taipei, Wellington, Mumbai, and Bangkok. Jakarta rebounded after sharp losses tied to a cabinet reshuffle, while Shanghai advanced despite fresh signs of deflation, as investors bet on continued policy support from Beijing.

Fidelity International economist Peiqian Liu pointed to stronger exports, growing AI investment, and last year’s stimulus measures as reasons for cautious optimism. She noted the U.S.-China trade truce extension until November has steadied near-term outlooks, with 2025 GDP forecasts edging closer to Beijing’s 5% target.

In Europe, London opened higher, with Paris and Frankfurt also gaining.

Oil prices climbed for a second day, supported by geopolitical tensions after Israeli strikes on Hamas targets in Qatar. Markets showed little immediate reaction to U.S. President Donald Trump’s warning that new tariffs could be imposed on China and India over their Russian oil imports if Europe followed suit.

Key figures at around 0715 GMT

Tokyo - Nikkei 225: UP 0.9 percent at 43,837.67 (close)
Hong Kong - Hang Seng Index: UP 1.0 percent at 26,195.55
Shanghai - Composite: UP 0.1 percent at 3,812.22 (close)
London - FTSE 100: UP 0.2 percent at 9,260.02
Euro/dollar: UP at $1.1712 from $1.1707 on Tuesday
Pound/dollar: UP at $1.3537 from $1.3527
Dollar/yen: UP at 147.45 from 147.42 yen
Euro/pound: DOWN at 86.51 pence from 86.57 pence
West Texas Intermediate: UP 1.0 percent at $63.23 per barrel
Brent North Sea Crude: UP 0.9 percent at $67.01 per barrel
New York - Dow: UP 0.4 percent at 45,711.34 (close)