Asia Stocks Rise on Rate Hike Expectations Amid Ongoing US-Iran Tensions

Asian stocks mostly rose on Wednesday as investors await the Federal Reserve's decision on interest rates. The Fed is expected to hike rates for the first time in three years, driven by elevated inflation above its target. U.S. futures also edged higher, while oil prices stabilized after rising on Tuesday due to tensions between the U.S. and Iran.

Japan's Nikkei 225 gained 0.4% to 63,721.89 despite a fourth consecutive month of trade deficit in August. South Korea's Kospi rose 1.3% to 6,711.62, while Hong Kong's Hang Seng edged up 0.1% to 24,700.62. The Shanghai Composite index climbed 0.6% to 3,886.48.

Artificial intelligence-related stocks remained volatile following calls from U.S. AI leaders to slow development for safety reasons. SoftBank Group dropped 1%, while Tokyo Electron rose 1.4%. Kioxia Holdings lost 2.9%, but SK Hynix climbed 2.9%.