MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.1% in early trade. Japan’s Nikkei added 1.9%, continuing its recent rebound, while U.S. stock futures edged 0.3% higher. The upbeat tone tracked Tuesday’s performance in the United States, where the S&P 500 and Nasdaq Composite notched their third straight session of gains. Softer retail sales and declining consumer confidence helped reinforce the narrative that the Fed may be preparing to ease policy.
Those expectations have spilled into emerging Asian markets, where investors are considering whether regional central banks could follow the Fed’s lead. Sat Duhra, portfolio manager at Janus Henderson Investors, noted that U.S. easing would set the stage for more assertive rate adjustments in Asia. Fed funds futures now imply an 80.7% likelihood of a 25-basis-point cut on December 10—up sharply from roughly even odds a week ago.
U.S. Treasury yields were slightly higher, with the 10-year note rising to 4.0113% after briefly dipping below 4% on Tuesday. In currency markets, sterling gained 0.2% to $1.3188 ahead of the UK government’s upcoming budget announcement. Finance Minister Rachel Reeves is widely expected to unveil tax increases to reassure markets as Britain faces a potential downgrade to its economic outlook. European futures mirrored the positive momentum, with pan-region, German DAX, and FTSE futures all advancing.
Oil prices steadied following geopolitical shifts. Brent crude rose 0.4% to $62.72 after U.S. President Donald Trump backed away from a deadline tied to a U.S.-backed peace proposal for Ukraine. Earlier, prices had slumped to a five-week low amid speculation that progress on the plan could lead to eased sanctions on Russia, increasing global supply. European energy prices also hit an 18-month low. Sources within OPEC+ indicated the group is likely to maintain current production levels at Sunday’s meeting.
In currency trading, the euro nudged 0.1% higher to $1.1586, while the dollar held steady at ¥156.045. The yen saw choppy trading as Reuters reported that the Bank of Japan is preparing markets for a possible rate hike as early as next month. The shift follows discussions between Prime Minister Sanae Takaichi and BOJ Governor Kazuo Ueda and comes amid rising political expectations of potential snap elections, according to the Yomiuri newspaper. Japanese government bonds extended declines, with short-term yields reaching levels not seen since June 2008.
The broader dollar index fell 0.2% to 99.686. The New Zealand dollar surged 1.3% after the Reserve Bank of New Zealand cut its cash rate by 25 basis points to 2.25% while toning down previous dovish signals. In Australia, shares gained 0.8% and the Australian dollar rose 0.6% after October consumer prices exceeded expectations, prompting speculation that the Reserve Bank of Australia might pause further easing.
In commodities and digital assets, spot gold traded 0.8% higher at $4,163.58 per ounce, supported by the weaker dollar and lower yields. Bitcoin rose 0.4% to $87,340.98, extending its steady upward trend.