Asian stocks mixed as investors pause after Fed-driven surge

Asian equities traded unevenly on Monday as traders took a breather following last week’s strong rally that was boosted by the US Federal Reserve’s decision to cut interest rates.

Tokyo led regional gains after the Bank of Japan clarified that it would unwind its vast holdings of exchange-traded funds (ETFs) gradually. The central bank had rattled markets on Friday when it first announced its plan to sell off the assets as part of its pivot away from ultra-loose monetary policy.

Investor sentiment also drew support from Friday’s call between US President Donald Trump and Chinese President Xi Jinping. Trump said the two leaders had made “progress on many very important issues,” including negotiations over the sale of TikTok’s US operations. He added that they would meet again at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea next month, and that he planned to visit China next year.

“While lacking apparent substance… it does look to have helped create a positive atmosphere to enable extension of the ongoing US-China détente,” noted Ray Attrill of National Australia Bank.

Global equities have enjoyed a solid rally in recent months, with hopes pinned on the Fed delivering more rate cuts to shore up growth as labour market concerns increasingly outweigh persistent inflation risks.

On Monday, Tokyo was the standout performer, climbing more than 1% after officials said the BOJ’s ETF sales would proceed slowly. Analysts estimated the pace of reduction could take up to a century to complete. The remarks helped calm nerves after Friday’s announcement triggered a sharp Nikkei sell-off.

Elsewhere in the region, Shanghai, Sydney, Seoul, Singapore and Taipei posted gains, while Hong Kong, Wellington, Manila and Jakarta finished lower.

The mixed session in Asia followed yet another record-breaking performance on Wall Street at the end of last week.

Key figures at around 0230 GMT

Tokyo - Nikkei 225: UP 1.5 percent at 45,729.33 (break)
Hong Kong - Hang Seng Index: DOWN 0.8 percent at 26,344.78
Shanghai - Composite: UP 0.1 percent at 3,822.08
Euro/dollar: DOWN at $1.1729 from $1.1745 on Friday
Pound/dollar: DOWN at $1.3461 from $1.3472
Dollar/yen: UP at 148.33 yen from 147.90 yen
Euro/pound: DOWN at 87.14 pence from 87.18 pence
West Texas Intermediate: UP 0.5 percent at $63.02 per barrel
Brent North Sea Crude: UP 0.6 percent at $67.09 per barrel
New York - Dow: UP 0.4 percent at 46,315.27 (close)
London - FTSE 100: DOWN 0.1 percent at 9,216.67 (close)