The Japan Times - Asian markets mostly drop ahead of Trump-Xi talks

Adding to selling pressure were expectations that Japan's central bank would hike interest rates later this year, despite holding them at its latest meeting.

While the Federal Reserve and boss Jerome Powell were not as forthright as hoped on future rate reductions, the mood on trading floors remained upbeat.

The US central bank lowered borrowing costs Wednesday for the first time since December after a series of reports pointed to a slowdown in the country's labour market, which offset stubbornly high inflation.

A closely watched gauge of future moves indicated two more this year but Powell warned decisions would be data-dependent.

With that in mind, even figures showing a sharp drop in initial jobless claims for last week did little to dampen expectations that rates will continue to be cut.

"The underlying trend remains one of only a gentle drift higher in claims, reinforcing the view that the US labour market is not showing signs of sudden weakness," said National Australia Bank's Rodrigo Catril.

All three main indexes ended Thursday at records, continuing a trend that has characterised markets in recent months, thanks to another surge in tech giants.

That came after news that chip titan Nvidia will invest $5 billion in struggling US rival Intel and jointly develop processors for PCs and data centres.

Asian traders moved cautiously in the morning, but selling picked up after the Bank of Japan's latest meeting.

Monetary policymakers kept rates on hold but only after a surprise 7-2 vote that indicated two members wanted a hike. That boosted bets on such a move before the end of the year.

The move came amid lingering political uncertainty and economic concerns fuelled by US tariffs.

The bank also said it would start offloading exchange-traded funds bought as part of its earlier monetary easing campaign that had helped boost equities.

Catril said the dissenters were "a strong signal that the BOJ will be hiking once political uncertainty is removed".

Before the announcement, official data showed inflation in the fourth-largest economy slowing to 2.7 percent in August, with rice price rises easing following a sharp spike that rattled the government.

Traders are now awaiting a news conference from bank boss Kazuo Ueda due later in the day.

Tokyo ended in the red, having enjoyed a strong start to the day.

There were also losses in Hong Kong, Shanghai, Singapore, Seoul, Taipei, Mumbai, Bangkok and Jakarta.

Sydney, Wellington and Manila rose with London, Paris and Frankfurt.

Talks between president Trump and Chinese counterpart Xi -- their first since June -- are due to take place later Friday, with the US president telling reporters they would discuss a deal to change ownership of the hugely popular video-sharing app TikTok.

The phone call also comes after high level officials from both sides met in Madrid where they spoke about trade between the economic superpowers, with the deadline for a US tariff pause approaching in November.

- Key figures at around 0715 GMT -

Tokyo - Nikkei 225: DOWN 0.6 percent at 45,045.81 (close)

Hong Kong - Hang Seng Index: DOWN 0.4 percent at 26,451.82

Shanghai - Composite: DOWN 0.3 percent at 3,820.09 (close)

London - FTSE 100: UP 0.1 percent at 9,240.41

Euro/dollar: DOWN at $1.1764 from $1.1785 on Thursday

Pound/dollar: DOWN at $1.3490 from $1.3550

Dollar/yen: UP at 147.90 yen from 147.97 yen

Euro/pound: UP at 87.18 pence from 86.96 pence

West Texas Intermediate: DOWN 0.3 percent at $63.38 per barrel

Brent North Sea Crude: DOWN 0.2 percent at $67.29 per barrel

New York - Dow: UP 0.3 percent at 46,142.42 (close)

T.Sato--JT