Tokyo Shares Rise as Fed Rate Hike Odds Diminish

Tokyo shares rose on Monday as concerns over inflation eased, reducing the likelihood of another Federal Reserve rate hike. The shift in sentiment comes amid sustained pressure from the bond market and anticipation of the Fed’s latest meeting minutes, set to be released on Wednesday. The minutes from the September meeting, when the Fed raised benchmark interest rates for the first time in three years, are closely watched for clues on future policy moves.

U.S. futures fell slightly, with the S&P 500 and Dow Jones Industrial Average each declining 0.2%, while Nasdaq futures dropped 0.3%. Rising bond yields, driven by stubborn inflation, high oil prices, and strong U.S. economic data, have increased borrowing costs, putting downward pressure on stock prices. The yield on the 10-year U.S. Treasury hit 5.27%, and the 30-year yield reached 5.63%, both marking more than 20-year highs.

This week will see the release of key U.S. economic indicators, including data on the services sector, unemployment, and consumer sentiment. Meanwhile, RXO Inc. shares surged over 20% after C.H. Robinson Worldwide announced a $5.8 billion cash-and-stock deal to acquire the company. In energy trading, U.S. crude oil dipped 0.5% to $90.68 a barrel, while Brent crude rose 0.7% to $102.91 a barrel.

European markets showed mixed results, with France’s CAC 40 down 0.8%, Germany’s DAX up 0.1%, and Britain’s FTSE 100 climbing 0.3%. Asian markets generally traded higher, though Shanghai and South Korea were closed for national holidays. In currency trading, the U.S. dollar strengthened to 157.91 Japanese yen, while the euro weakened to $1.1204.