Asia stocks rise on rate cut wagers, yen wallows at 38-year lows

Asian stocks rose on Wednesday following remarks by Federal Reserve Chair Jerome Powell, indicating potential upcoming U.S. rate cuts.

The MSCI Asia-Pacific index, excluding Japan, increased by 0.64%, driven by tech stocks, while Japan’s Nikkei surged 1.4%.

Futures suggested European markets would also open higher, with particular attention on France’s political landscape ahead of Sunday’s runoff election.

Powell confirmed the U.S. is on a “disinflationary path” but emphasized the need for more data before cutting interest rates.

His comments lowered U.S. Treasury yields overnight and kept the dollar subdued.

Investment strategist Ben Bennett interpreted Powell’s statements as suggesting possible rate cuts starting in September.

Traders are now pricing in a significant chance of rate cuts this year.Investors are closely monitoring U.S. labor market data, with attention shifting to Friday’s nonfarm payrolls report.

Meanwhile, the minutes of the Fed’s last meeting, due later on Wednesday, are expected to provide further insights into the Fed’s rate outlook.

The prospect of U.S. rate cuts has restrained the dollar’s rise, while Chinese stocks lagged behind.

(Reuters)