Asian shares mixed ahead of Fed interest rate decision
Flaring Japan-China tensions also were weighing on sentiment, as traders remained cautious.
Borussia's Julian Brandt celebrates with teammates after scoring the opening goal during Germany Bundesliga soccer match between Borussia Dortmund and TSG 1899 Hoffenheim, in Dortmund, Germany, Sunday, Dec. 7, 2025 (AP)
BANGKOK: Shares are mixed in Asia as investors tread cautiously ahead of an interest rate decision this week by the Federal Reserve.
US futures and oil prices rose.
Flaring Japan-China tensions also were weighing on sentiment, as traders remained cautious.
Japan and Australia urged calm on Sunday after Chinese military aircraft locked radar on Japanese fighter jets, weeks after a remark about Taiwan by Japanese Prime Minister Sanae Takaichi stirred tensions with Beijing.
Defence Minister Shinjiro Koizumi said Japan had formally protested the incident, calling it “an extremely regrettable” act and “a dangerous” one that “exceeded the scope necessary for safe aircraft operations.”
Tokyo's Nikkei 225 index was unchanged at 50,491.53.
Also darkening the mood, revised government data released Monday showed that Japan's economy contracted at an annual pace of 2.3 per cent in the July-September period, not the 1.8 per cent annual rate earlier reported. Japanese exports suffered from the impact of US President Donald Trump's tariffs and public investments slipped.
Chinese markets were mixed, with Hong Kong's Hang Seng falling 1 per cent to 25,835.99, while the Shanghai Composite index gained 0.6 per cent to 3,927.19.
Chinese leaders were due to hold a major annual economic policy planning conference in coming days.
Elsewhere in Asia, South Korea's Kospi added 0.2 per cent to 4,109.21, while Taiwan's benchmark jumped 0.8 per cent.
In Australia, the S&P/ASX 200 shed 0.3 per cent to 8,609.70.
On Friday, the S&P 500 added 0.2 per cent and finished just shy of its record closing level set in October. It briefly topped the mark during the day, before paring its gain and closing at 6,870.40.
The Dow Jones Industrial Average added 0.2 per cent to 47,954.99, and the Nasdaq composite gained 0.3 per cent to 23,578.13.
The modest moves capped a quiet week for Wall Street, offering a respite following weeks of sharp and scary swings.
Ulta Beauty helped lead the market and jumped 12.7 per cent after the retailer reported stronger profit and revenue for the latest quarter than expected. Victoria's Secret & Co. soared 18 per cent after it delivered a milder loss for the latest quarter than analysts expected.
Warner Bros. Discovery rose 6.3 per cent after Netflix said it would buy Warner Bros. for USD 72 billion in cash and stock following its pending split from Discovery Global. Netflix shares fell 2.9 per cent and Paramount Skydance, which earlier had been seen as a front-runner to buy Warner Bros., sank 9.8 per cent.
This week, attention will focus on what the Federal Reserve will do with interest rates, whether too many dollars are flowing into artificial-intelligence technology and if sharp drops for cryptocurrencies would bleed over into other markets.
After some back and forth, the widespread expectation among traders is now that the Fed will cut its main interest rate Wednesday in hopes of shoring up the slowing US job market. If it does, that would be the third cut of the year.
Lower interest rates boost prices for investments and help the economy. The downside is that they can worsen inflation, which is stubbornly remaining above the Fed's 2 per cent target.
Economic reports released on Friday did little to change expectations for a coming cut. One said that an underlying measure of inflation that the Fed prefers to use was at 2.8 per cent in September, exactly as economists expected.
A separate report said US consumers appear to be downgrading their expectations for inflation coming in the near future. They're now forecasting 4.1 per cent inflation for the year ahead, down from their forecast of 4.5 per cent last month, according to the University of Michigan.
That's the lowest such forecast since January, which is important because heightened expectations for inflation can create a vicious cycle that only worsens inflation.
In other dealings early Monday, US benchmark crude oil added 11 cents to USD 60.19 per barrel. Brent crude, the international standard, also gained 11 cents, to USD 63.86 per barrel.
The dollar slipped to 155.09 Japanese yen from 155.30 yen late Friday. The euro rose to USD 1.1651 from USD 1.1639.