Asian Shares Mixed As Traders Scale Back Fed Rate Cut Bets

(RTTNews) - Asian stocks were mixed on Wednesday as fresh signs of a resilient U.S. economy clouded the outlook for U.S. rate cuts in 2025.

Treasuries were steady after falling across the curve in the previous session. The U.S. government's monthly auction of 10-year notes drew the highest yield since 2007 after the release of upbeat U.S. service-sector activity and job openings data.

The dollar stood tall and the Japanese yen sagged close to levels that drew intervention last year, while gold was little changed below $2,650 per ounce on hawkish FOMC rate outlook.

Fed Bank of Atlanta President Raphael Bostic said on Tuesday that officials should be cautious with policy decisions, given uneven progress on lowering inflation.

Oil traded higher amid signs of reduced supplies from Russia and OPEC members and industry data showing another drop in U.S. inventories.

China's Shanghai Composite index dropped 0.3 percent as the yuan fell to its lowest level since September 2023 despite renewed efforts by the country's central bank to support the currency.

Hong Kong's Hang Seng index dipped half a percent. According to a Bloomberg report, banks such as HSBC Holdings and Standard Chartered are hoarding cash and liquidity despite calls by the government to help out struggling small businesses with funding.

Japan's Nikkei was down 0.4 percent, with tech stocks such as Advantest and Tokyo Electron surging despite a sell-off in U.S. tech stocks overnight, led by Nvidia as a product presentation by the company left investors wanting more.

South Korea's Kospi average was up more than 1 percent, led by tech and healthcare stocks. Samsung Electronics jumped 2.7 percent despite its profit outlook falling far short of expectations.

Australia's benchmark S&P/ASX 200 was up 0.6 percent as a drop in core inflation rate bolstered the case for a cut in interest rates by RBA as early as next month.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index was marginally higher. U.S. stocks fell overnight as inflation and interest rate concerns returned to the fore after the release of upbeat economic data.

The tech-heavy Nasdaq Composite slumped 1.9 percent, the S&P 500 lost 1.1 percent and the narrower Dow shed 0.4 percent as the yield on the benchmark ten-year note surged to an eight-month high.

U.S. service sector growth picked up in December, a measure of prices paid for inputs rose to near a two-year high, and job openings unexpectedly increased in November, prompting traders to push back their expectations on when the Fed can cut interest rates this year.

European stocks closed mostly higher on Tuesday despite data showing that inflation in the eurozone rose to its highest level in five months for December.

The pan European STOXX 600 gained 0.3 percent. The German DAX and France's CAC 40 both rose by 0.6 percent while the U.K.'s FTSE 100 finished marginally lower.