Asian stocks edge higher as investors await key US economic data

Asian stocks mostly advanced on Wednesday, taking a cue from Wall Street’s renewed rally, though gains remained modest as traders look ahead to crucial US economic data ahead of next week’s Federal Reserve meeting.

With expectations of a third consecutive US interest rate cut already factored in, market activity has slowed in anticipation of two key indicators: the ADP private-sector jobs report due later Wednesday, and Friday’s personal consumption expenditure (PCE) index, the Fed’s preferred measure of inflation.

Money markets currently place the likelihood of a December 10 rate cut at around 90 percent, with forecasts suggesting three more reductions by the end of next year. Optimism has been further lifted by reports that President Donald Trump’s top economic adviser, Kevin Hassett — a strong supporter of rate cuts — is the leading candidate to take over the Fed when Jerome Powell’s term expires in May.

Still, analysts note ongoing divisions within the Fed over whether to prioritize stubborn inflation or a cooling labour market. Andrew Brenner of NatAlliance Securities warned that the outcome could be a “hawkish cut”.

IG’s Fabien Yip said Friday’s core PCE reading will be the final major inflation signal before the Fed’s December decision. Any unexpected shift, he noted, could alter the central bank’s outlook, especially as personal income and spending data released alongside the PCE will offer insight into consumer strength.

Despite concerns about slowing US growth and weakening job trends, early signs from the holiday shopping period offered some optimism. The National Retail Federation reported a record 202.9 million consumers shopped over the five-day Black Friday weekend, surpassing expectations and reflecting strong consumer engagement.

Wall Street’s three major indexes all closed higher on Tuesday, and most Asian markets followed the upward trend. Tokyo gained more than one percent, while Seoul, Sydney, Singapore, Wellington, Taipei and Jakarta also advanced. Hong Kong, Shanghai and Manila slipped.

Meanwhile, Bitcoin climbed back above $90,000 after a sharp early-week drop that saw the cryptocurrency fall nearly 10 percent. Sentiment remains fragile, with the token still well below its October record above $126,250.

Key figures at around 0230 GMT

Tokyo - Nikkei 225: UP 1.1 percent at 49,862.94 (break)
Hong Kong - Hang Seng Index: DOWN 0.7 percent at 25,922.79
Shanghai - Composite: DOWN 0.1 percent at 3,895.81
Dollar/yen: DOWN at 155.79 yen from 155.86 yen
Euro/dollar: UP at $1.1636 from $1.1622
Pound/dollar: UP at $1.3225 from $1.3209
Euro/pound: DOWN at 87.98 pence from 88.00 pence
West Texas Intermediate: DOWN 0.2 percent at $58.53 per barrel
Brent North Sea Crude: DOWN 0.2 percent at $62.33 per barrel
New York - Dow: UP 0.4 percent at 47,474.46 (close)
London - FTSE 100: FLAT at 9,701.80 (close)