Asia stocks mixed as Fed cut bets lift Japan, S.Korea; Australia Q3 GDP in focus

Asian stock markets were mixed on Wednesday, with Japan and South Korea leading gains while other regional markets remained subdued, as investors weighed rising expectations of a U.S. Federal Reserve rate cut next week.

Australian equities were largely unchanged after the country’s economy posted its strongest annual growth in two years in the third quarter, but quarterly growth fell short of expectations.

Wall Street indexes ended modestly higher overnight, with the tech sector leading gains, while futures tied to them edged higher in Asian trading on Wednesday.

Japan, S. Korea shares rise tracking Wall St gains

Japan’s Nikkei 225 jumped 1.6%, while South Korea’s KOSPI added 1.3%.

Investors have sharply increased bets on a December rate cut by the Fed, citing slowing inflation and weaker economic signals. According to the CME FedWatch Tool, the probability of a 25‑basis-point cut has surged above 85%, up from below 40% a week ago.

However, market participants remain cautious, noting mixed signals from Fed policymakers that leave the timing and magnitude of any action uncertain.

Traders are closely monitoring upcoming U.S. data releases, including the ADP employment report and the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge.

Back in Asia, Singapore’s Straits Times Index edged 0.3% higher, while India’s Nifty 50 fell 0.4%.