Asian Shares Mixed as Investors Eye Fed’s Expected First Rate Cut

Asian markets traded mixed Wednesday after U.S. stocks edged down from record highs as investors awaited what many expect will be the Federal Reserve’s first interest-rate cut of the year.

Japan’s benchmark Nikkei 225 rose 0.2% to 44,995.79 in morning trading, while Australia’s S&P/ASX 200 slipped 0.7% to 8,812.80 and South Korea’s Kospi fell nearly 1.0% to 3,415.71. Hong Kong’s Hang Seng climbed about 0.9% to 26,662.13, and the Shanghai Composite was little changed, losing less than 0.1% to 3,858.74.

Tokyo’s gains came despite a government report showing Japan’s exports to the United States fell 13.8% in August from a year earlier, marking the fifth straight monthly decline. The Finance Ministry said the drop reflected lower auto exports; the data covered August, when U.S. tariffs on Japanese automobiles and auto parts were higher than they are today. U.S. tariffs on those goods were cut this week from an initial 27.5% level to 15%, still well above the pre-tariff 2.5% rate. Overall, Japan’s exports to the world were little changed in August, slipping 0.1% as shipments rose to Europe and the Middle East.

On Wall Street, the S&P 500 slipped 0.1% from its latest all-time high, falling 8.52 points to 6,606.76. The Dow Jones Industrial Average dropped 125.55 points to 45,757.90, and the Nasdaq composite fell 14.79 points to 22,333.96. Treasury yields eased slightly, with the 10-year Treasury yield down to about 4.03% from 4.05% late Monday.

Investors said the primary focus remained on expectations that the Fed will cut rates, likely beginning Wednesday, to give the economy a boost. Traders have increasingly priced in a series of cuts through the end of the year and into 2026 amid signs of cooling in the U.S. jobs market. A stronger-than-expected retail sales report released Tuesday showed shoppers increased spending by more than economists forecast in the latest month; analysts noted part of that rise could reflect higher prices rather than a pure increase in volume, but it also suggests household spending might hold up and help avert a recession.

High expectations for easing have helped push equities to record levels, but market strategists caution that lofty expectations can heighten downside risk if policy moves disappoint. A Bank of America survey of global fund managers showed a rotation toward equities, with investors tilting into stocks at the highest level in seven months even as a record 58% of respondents said equities looked overvalued.

Among individual movers, New York Times Co. shares fell 1.6% after former President Donald Trump filed a $15 billion defamation lawsuit against the newspaper and four of its journalists, alleging a pattern of intentional and malicious defamation tied to coverage and a book published during the run-up to the 2024 election. Oracle shares rose 1.5% on speculation the company could be involved in a deal to keep TikTok operating in the United States.

In energy markets, benchmark U.S. crude traded at about $64.44 a barrel, down 8 cents, while Brent crude was about $68.38 a barrel, down 9 cents. In currency markets, the dollar strengthened slightly to 146.69 Japanese yen from 146.40 yen, and the euro slipped to $1.1852 from $1.1867.

Traders and analysts said the coming Fed decision and accompanying commentary will be the immediate driver for markets, with global investors scanning economic data, corporate earnings and geopolitical developments for clues about the pace and timing of future policy moves.