Asian Stocks Stutter as Traders Prepare for Expected Rate Hike
Asian stocks struggled on Wednesday as investors prepared for an expected interest rate hike by the Federal Reserve later in the day. The Fed is widely tipped to lift borrowing costs for the first time since 2023, dealing a heavy blow to a rally in global equities that saw several markets hit record highs in the first half of the year.
Data showing strong jobs creation and stubbornly high inflation have cemented expectations, with traders pricing a more than 90 percent chance board members choose to tighten monetary policy. The Fed's announcement is followed by the Bank of Japan on Friday, which is also expected to hike owing to rising inflation as well as the need to maintain support for the yen.
A drop in oil prices provided some optimism, though both main contracts remain well above $100 a barrel. A planned summit between US President Donald Trump and Chinese counterpart Xi Jinping may lead to tariff reductions on some goods, including US energy and agricultural products.