Nikkei 225 Bounces Back After Fed Rate Expectations Shift

The Nikkei 225 index in Japan rebounded on Friday, rising 1.07% to 64,902 points and ending a four-session losing streak.

The recovery came as investors reassessed their expectations for the US Federal Reserve's September policy decision following comments from Fed Governor Christopher Waller that he would favor leaving interest rates unchanged if inflationary pressures continue to moderate.

The improved market sentiment was driven by changing expectations around US monetary policy, with roughly even chances of a quarter-point Fed rate increase this month now seen compared to higher expectations earlier in the week.