The Japan Times - Markets mixed ahead of expected US rate cut

Equities have enjoyed a strong run-up over recent weeks as a string of data on jobs and inflation provided the US central bank with enough leeway to resume its rate reductions.

Wednesday's policy decision follows figures showing the labour market continuing to soften, while prices have not spiked as much as feared in the wake of US President Donald Trump's tariff war.

The keenly awaited meeting is expected to see the Fed lower borrowing costs 25 basis points, although some observers predict it could go to 50 points.

Trump said on Sunday "I think you have a big cut. It's perfect for cutting".

Still, Pepperstone's Chris Weston wrote: "The market would be surprised if we saw any outcome other than a 25-basis-point cut from the Fed, even if several Fed governors do vote for a 50-basis-point cut.

"Attention will quickly turn to the tone of the (policy board) statement, the guidance from Powell's press conference."

The central banks of Canada, Britain and Japan are due to meet this week.

Asia fluctuated after a tepid Friday on Wall Street that saw the Nasdaq inch up to a new peak.

Shanghai edged down after data showed further weakness in China's economy, with growth in retail sales and industrial production much slower than forecast.

"Given the slowdown of the past few months, we expect that there's a strong case for additional short-term stimulus efforts," said Lynn Song, chief economist for Greater China at ING.

And Sheana Yue of Oxford Economics warned "the economy could fall off a cliff in (the fourth quarter) if the sluggish July and August activity pace is sustained, bringing into focus -- once again -- the urgent need for stimulus".

There were also losses in Singapore, Sydney, Taipei, Manila and Wellington.

But Seoul hit another record after South Korean officials scrapped a plan to lower the capital gains tax threshold for stock investors.

Hong Kong, Jakarta and Bangkok also advanced, while Tokyo was closed for a break.

Paris and Frankfurt were on the front foot while London was flat.

In company news Hong Kong-listed Pop Mart, which makes the global smash Labubu dolls tanked more than six percent, wiping billions off its valuation, after JP Morgan downgraded it saying it was overpriced.

The firm is up around 180 percent this year but is down more than a fifth from its August record owing to signs demand for the dolls is waning.

And in Sydney, ANZ bank, one of Australia's "big four" lenders, retreated following news it had agreed to pay a record fine of Aus$240 million (US$159.5 million) over "widespread misconduct".

Also in view are talks between China and the United States in Madrid that will cover a range of issues including trade, with an eye on a November deadline for their tariff pause.

Chinese Vice Premier He Lifeng and his team will also discuss their dispute over TikTok with the US delegation led by Treasury Secretary Scott Bessent.

The negotiations come after China launched two investigations into the US semiconductor sector on Saturday.

- Key figures at around 0810 GMT -

Hong Kong - Hang Seng Index: UP 0.2 percent at 26,446.56 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,860.50 (close)

London - FTSE 100: FLAT at 9,282.99

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: DOWN at $1.1730 from $1.1731 on Friday

Pound/dollar: UP at $1.3585 from $1.3560

Dollar/yen: DOWN at 147.44 from 147.67 yen

Euro/pound: DOWN at 86.39 pence from 86.52 pence

West Texas Intermediate: UP 0.5 percent at $63.00 per barrel

Brent North Sea Crude: UP 0.5 percent at $67.29 per barrel

New York - Dow: DOWN 0.6 percent at 45,834.22 points (close)

T.Maeda--JT