Equity investors adopted a cautious stance on Monday as they anticipated a significant interest rate cut by the Federal Reserve this week while also grappling with concerns over the Chinese economy.
The yen appreciated to less than 140 against the dollar for the first time since mid-2023, ahead of the Federal Reserve’s decision on Wednesday and a subsequent Bank of Japan policy meeting. Gold prices reached a new record high.
Recent data indicating a slowdown in US inflation has fueled speculation about a substantial 50-basis-point rate cut by the Fed. Some analysts, however, caution that such a move might signal deeper economic concerns, particularly given recent softening in the labor market.
Wall Street’s main indexes rose on Friday, bringing the Dow and S&P 500 close to record highs, while Asian markets showed mixed results. Hong Kong, Sydney, and other Asian cities saw slight gains, whereas Singapore and Wellington experienced declines.
Currency markets saw the yen strengthening, and gold prices climbing to a record $2,589.70. Meanwhile, concerns over China’s economic performance continued after weak data on credit, retail sales, and industrial production, raising doubts about the effectiveness of recent policy measures.
The Federal Reserve’s upcoming decision, followed by the Bank of Japan’s meeting on Friday, is expected to significantly influence market movements.
