Asian Stocks Rise After Fed Rate Cut, Japan Hits Record High
Most Asian stock markets advanced on Thursday after the U.S. Federal Reserve cut interest rates and signaled more reductions ahead. Japan led the gains, with the Nikkei 225 hitting a fresh record high.
Japan Leads Asia Higher
The Nikkei 225 climbed 1.2% to a new peak of 45,296.21, supported by energy and technology shares. The index has gained nearly 15% so far this year, despite U.S. tariff pressures. The broader TOPIX index also rose 0.6%. A weaker yen further boosted Japanese exporters.
South Korea’s KOSPI index gained 1%, driven by strong performances from chipmakers SK Hynix and Samsung Electronics. Renewed AI optimism from the U.S. added momentum.
Fed Cut Boosts Risk Appetite
On Wednesday, the Federal Reserve lowered its benchmark interest rate by 25 basis points to a range of 4.00–4.25%. This was the first cut since December. Policymakers signaled two more cuts before year-end. Fed Chair Jerome Powell described the move as “risk management” amid a softening U.S. labor market.
The Fed’s cautious easing path increased risk appetite in Asian markets, with traders betting U.S. borrowing costs could fall below 3.5% by 2026.
China Shares Reach Decade Highs
China’s Shanghai Composite rose 0.5%, while the CSI 300 gained 0.3%, both reaching decade highs. Semiconductor stocks surged after reports that China’s regulator instructed domestic tech firms to halt purchases of Nvidia’s AI chips.
SMIC shares climbed over 5%, while Baidu extended its rally with a 6% gain, adding to a 16% jump in the previous session. Reports said Baidu has started using its self-developed Kunlun P800 chip for AI training.
Hong Kong’s Hang Seng index slipped 0.3%, but chipmaking stocks supported broader sentiment.
Regional Markets Mixed
Singapore’s Straits Times Index edged 0.2% higher, while India’s Nifty 50 gained 0.4% at the open.
Australia bucked the regional trend. The S&P/ASX 200 fell 0.6%, dragged by a 5% slump in energy shares as oil prices declined. Employment data showed a loss of 5,400 jobs in August, including a sharp drop in full-time roles. Hours worked also fell 0.4%, signaling a softer labor market. The report strengthened expectations of another RBA rate cut this year.
In New Zealand, the NZX 50 fell nearly 1% after GDP contracted 0.9% in Q2, worse than forecasts. Annual GDP fell 0.6%, increasing pressure on the RBNZ to speed up monetary easing.
