Asian markets have extended their gains, following a record day on Wall Street, as fresh data indicates a weakening US jobs market. This has led to increased expectations of a series of Federal Reserve rate cuts. The latest figures show that the Bureau of Labor Statistics revised down the number of new jobs in the 12 months through March by a record 911,000, suggesting the economy is slowing faster than initially thought.
The US central bank’s decision-making for the rest of the year is expected to be guided by the release of consumer price index (CPI) figures. Fed boss Jerome Powell had previously indicated that cuts were in the pipeline, despite initial pressure from US President Donald Trump to do so due to concerns over high inflation. Analysts now believe the only question is how big the reduction will be at the bank’s policy meeting next week.
“The punchy revision will only accelerate the pressure on the Fed to ease in September, and throughout the balance of 2025,” said Chris Weston at Pepperstone. He added that while expectations could evolve if the core CPI print is benign, the Fed is likely to cut by 25 basis points and guide with a strong bias that more cuts are to come in the months ahead.
Asian markets continued the positive run on Wednesday, with Hong Kong rallying to hit a fresh four-year high and Seoul nearing a record, fueled by hopes for South Korean economic reforms. Tokyo, Sydney, Singapore, Taipei, Wellington, and Manila also saw gains. Jakarta recovered some of Tuesday’s losses, which were triggered by President Prabowo Subianto’s removal of Finance Minister Sri Mulyani Indrawati in a cabinet reshuffle following deadly anti-government protests.
In China, the CPI fell back into negative territory, indicating that consumers are still struggling. However, Fidelity International economist Peiqian Liu remains upbeat, citing last year’s stimulus measures, the emergence of the DeepSeek AI platform, improving exports, and AI investment. The extension of the US-China trade truce until early November has also provided additional breathing room, supporting the credibility of this year’s growth targets.
Key figures at around 0230 GMT include the Tokyo Nikkei 225, which rose 0.5% to 43,684.29, and the Hong Kong Hang Seng Index, which gained 1.0% to 26,206.05. The Shanghai Composite was up 0.1% at 3,809.48, while the euro/dollar was down at $1.1692. West Texas Intermediate crude oil prices rose 0.7% to $63.07 per barrel, and Brent North Sea Crude was up 0.6% at $66.80 per barrel.
The positive trend in Asian markets is expected to continue, with investors closely watching the US Federal Reserve’s next move. The release of CPI figures later in the day will provide further guidance on the US central bank’s decision-making for the rest of the year. As the global economy continues to evolve, investors will be keeping a close eye on key economic indicators and central bank actions.
