Asian markets ended the week on a mixed note, with most major indexes falling on Friday, following a strong week for investors after the US Federal Reserve cut interest rates. The Fed’s decision to lower borrowing costs for the first time since December was seen as a positive move, but the central bank’s boss, Jerome Powell, warned that future rate decisions would be data-dependent.
The US labor market has been showing signs of slowdown, with a series of reports pointing to a decline in job growth, which offset stubbornly high inflation. Despite this, the mood on trading floors remained upbeat, with all three main indexes in the US ending Thursday at record highs, thanks to a surge in tech giants. The news that chip titan Nvidia will invest $5 billion in struggling US rival Intel and jointly develop processors for PCs and data centers also boosted investor sentiment.
In Asia, the Bank of Japan’s latest meeting saw monetary policymakers keep interest rates on hold, but with a surprise seven-to-two vote that indicated two members wanted a hike. This boosted bets on a rate hike before the end of the year, despite lingering political uncertainty and economic concerns fueled by US tariffs. The bank also announced that it would start offloading exchange-traded funds bought as part of its earlier monetary easing campaign.
The Tokyo market ended in the red, having enjoyed a strong start to the day, while there were also losses in Hong Kong, Shanghai, Singapore, Seoul, Taipei, Mumbai, Bangkok, and Jakarta. However, Sydney, Wellington, and Manila rose, along with London, Paris, and Frankfurt.
Investors are now awaiting a news conference from Bank of Japan boss Kazuo Ueda, due later in the day. Meanwhile, a phone call between US President Donald Trump and Chinese counterpart Xi Jinping, their first since June, is scheduled to take place later on Friday. The two leaders are expected to discuss a range of issues, including trade and the ownership of the popular video-sharing app TikTok.
The deadline for a US tariff pause on Chinese goods is approaching in November, and high-level officials from both sides met in Madrid recently to discuss trade between the economic superpowers. The talks between Trump and Xi come at a critical time, with the global economy facing uncertainty and trade tensions between the US and China continuing to escalate.
As the markets look ahead to next week, investors will be closely watching the developments in the US-China trade talks and the potential impact on the global economy. The interest rate decisions by central banks, including the Bank of Japan, will also be closely monitored, as they navigate the challenges of slowing growth and rising trade tensions.