Asian Stocks Turn Bullish

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Asian Stocks Turn Bullish

Asian Stocks Turn Bullish After Fed'S Big Rate Cut

Asian stocks are rejoicing in a rate cut that is bigger than expected by the US Federal Reserve on Thursday. The Japanese markets have also surged higher on the JPY weakness following the BoJ meeting.

However, the regional markets showed a subdued reaction to the FOMC decision as the US Central Bank has poured water on more rate cuts this year. The bank has stressed the need for neutral rates which means we may not get a bigger rate cut in 2024 again.

Nikkei 225 Up By 2% On Yen Weakness

Meanwhile, the US stock index futures are trending higher, followed by the rate cut. If we look at Nikkei 225, it has gained 2% on Thursday while the TOPIX is also up by 2.8%.

The gains in the Japanese markets are more due to the weaker Yan as compared to the rate cut in the USA. The Fed's future guidance has sent the Dollar flying against the JPY.

The stock rally in the Japanese market is also due to the positioning of traders before the BoJ meeting. For now, experts are not sure about whether there will be another rate hike or not.

Next up is the Japanese CPI, which will be released on Friday. That will also provide insights into whether the BoJ will go with another rate hike in 2024.

The ASX 200 from Australia also jumped 0.3% but remained under pressure due to a strong labor market report. This means the RBA can keep the rates at elevated levels.

Similarly, the Shenzhen CSI 300 has gained 0.5% while the Shanghai Composite index is up by 0.4% for the day. Hong Kongs Hang Seng index, which is also a prominent stock market, jumped by 0.6%.

Up ahead of time, the Peoples Bank of China (PBoC) will also announce its decisions on benchmark loan prime rate. However, experts believe that China's Central Bank will likely keep rates unchanged for now.

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