Asian Markets Turn Cautious as Investors Await Warsh Speech

The Asian markets turned cautious on Friday after a tech-driven rally led by Nvidia, while currency and bond markets held their breath for Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Symposium.

Nvidia jumped nearly 9% overnight after releasing robust results and signaling that the AI spending boom has years left to run. Taiwanese shares gained 0.8%, but South Korea's KOSPI fell 1.5%. The MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2%, while Japan's Nikkei rose 0.5%.

Fed officials have been sounding the alarm about sticky inflation, and Warsh is presiding over a divided Fed with several policymakers calling for interest rate increases to stem price pressures. Futures imply around a 35% chance that the Fed will raise interest rates when it meets on September 16 and are fully priced for a move by December.

The market is hoping Warsh will reduce some of the uncertainty surrounding the Fed's reaction function, but analysts at ANZ do not expect him to offer forward guidance. If Warsh offers too little, that could lead to an adverse market reaction.