Asian markets moved cautiously on Monday as the Asian market outlook shifted ahead of a major Federal Reserve rate decision. Investors monitored geopolitical tensions and economic indicators closely. Furthermore, the Asian market outlook weakened after renewed friction between Japan and China.
Japan urged calm after Chinese military aircraft locked radar on Japanese fighter jets. Defense Minister Shinjiro Koizumi condemned the incident and demanded accountability. He said the action threatened safety and escalated regional risks. Additionally, Japan raised its concerns directly with Beijing and emphasized the need for restraint.
Japan’s Nikkei 225 dipped 0.2 percent after new data confirmed a sharper economic contraction. The government reported a 2.3 percent annualized decline in the July-September quarter. Analysts said weaker exports and reduced public investment drove the downturn. They also warned that trade pressures continued to limit growth and influence sentiment.
Meanwhile, Chinese markets delivered mixed performances. Hong Kong’s Hang Seng fell 0.9 percent. However, the Shanghai Composite gained 0.6 percent. Chinese leaders began annual economic planning meetings as new trade figures showed a 5.9 percent rise in November exports. Although exports to the United States dropped sharply, stronger demand from other regions helped stabilize overall shipments.
Elsewhere in Asia, South Korea’s Kospi climbed 1.3 percent and Taiwan’s benchmark gained 1.2 percent. Meanwhile, Australia’s S&P/ASX 200 slipped 0.1 percent as traders waited for clearer direction on global rates.
U.S. markets ended last week with modest gains. The S&P 500 approached its record. The Dow Jones and Nasdaq also rose slightly. Analysts said recent volatility eased as investors prepared for the Federal Reserve’s next move. Moreover, traders adjusted positions as corporate news influenced risk appetite.
Corporate activity also shaped trading sentiment. Ulta Beauty surged after strong earnings. Victoria’s Secret advanced after reporting smaller losses. Warner Bros. Discovery gained after Netflix agreed to purchase the company. However, Netflix shares dropped as investors reviewed the deal.
Investors focused intensely on the upcoming Federal Reserve decision. Many traders expected a rate cut as officials attempted to support a softening labor market. However, analysts warned that lower rates could fuel renewed inflation. Inflation remained above the Fed’s 2 percent target and continued to pressure policymakers. Consequently, markets watched every statement closely.
New U.S. data added momentum to expectations of a rate change. Core inflation reached 2.8 percent in September. A consumer survey showed declining inflation expectations from American households. Economists viewed the shift as a positive sign for long-term stability. Moreover, they said calmer expectations could slow future price increases.
Oil prices edged higher in early trading. U.S. crude reached $60.22 per barrel. Brent crude moved to $63.86. Currency markets stayed steady as the dollar slipped slightly against the yen and the euro strengthened.
The Asian market outlook remained uncertain as investors awaited the Fed’s final decision. Market watchers expected increased volatility and continued to monitor diplomatic developments, technology investment trends, and economic signals across major economies.
