Asian Stocks Advance as Nikkei Hits Record High, Expectations for Fed Rate Cut Grow

Asian equities advanced Wednesday, led by Japan’s Nikkei 225, which hit an all-time high above 43,000 as trading resumed following a holiday. The MSCI All Country World Index touched a record of 949.19, too. The S&P 500 and Nasdaq reached fresh records on Wall Street, with S&P 500 e-minis remained steady early in the Asian session.

EUROSTOXX 50 futures are up by 0.5%, DAX futures added 0.5%, and FTSE futures gained 0.2%. The U.S. dollar stayed subdued, and ether pushed to its highest level since 2021, showing that investors are feeling confident as they expect the Fed to cut interest rates next month.

Inflation data keeps Fed easing hopes alive :

New U.S. consumer price information confirmed that inflation edged up 0.2% in July, with an annual rate of 2.7%, which is a little less than expectations. Traders read it as a sign that the Fed might opt for a September rate cut. Investors are now 94% certain of a cut next month, up from 86% the day before and just 57% a month ago, according to the CME FedWatch tool. Weaker jobs data at the start of this month and lingering trade worries have helped support those bets.

Japan’s business outlook improves:

In Japan a new survey showed manufacturers regained confidence after a recent trade deal with the U.S., while slowing wholesale inflation suggested easing upward pressure on raw material prices, which could help support the central bank’s cautious policy stance.

Analysts said this combination of stronger sentiment and controlled inflation could help Japan maintain momentum, especially in technology and export-driven sectors.

Commodities and currency moves

The U.S. dollar eased for a second day, with only modest gains booked against most of its major peers. The dollar was steady at 147.95 yen, and the euro inched up less than 0.1% to $1.1683 as risk aversion led some investors to unwind past bets against the world’s most widely held currencies.

Gold rose by 0.2% to $3,350.09 per ounce, and oil prices were little changed, with U.S. crude at $63.27 a barrel. In cryptocurrencies, ether was up 1% at $4,679.47 to reach its highest since December 2021.