Asian equities opened the final month of 2025 on a steady footing as U.S. rate-cut optimism supported risk sentiment ahead of key economic data this week. The Japanese yen strengthened, with investors closely monitoring signals of a potential near-term rate hike from the Bank of Japan.
The yen traded around 155.64 per U.S. dollar as BOJ Governor Kazuo Ueda told business leaders in Nagoya that the central bank will evaluate the “pros and cons” of raising interest rates at its December policy meeting.
In equities, MSCI’s Asia-Pacific ex-Japan index held near 703.19, up 23.5% year-to-date and on course for its best annual performance since 2017. Japan’s Nikkei slipped 1.3%, while Hong Kong’s Hang Seng gained over 1%, helping lift regional sentiment. U.S. futures eased during Asian hours.
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Analysts say improving sentiment reflects fading macro worries from mid-November. “The risk bulls roll into December feeling positive about directional bias,” said Chris Weston of Pepperstone, noting a shift from caution to fear of missing out.
This week’s U.S. data — including manufacturing, services, and consumer sentiment — will shape expectations for a December rate cut. With policymakers sounding increasingly dovish, traders see an 87% probability of a cut this month.
Matt Simpson of StoneX said December could bring heightened volatility, especially if U.S. data confirms a slowdown without signaling recession. Such an outcome would likely weaken the U.S. dollar, which has already fallen 8% this year.
Early readings on U.S. consumer spending remain strong. Adobe Analytics reported $11.8 billion in Black Friday online sales, up 9.1% from 2024.
The yen remains in focus amid uncertainty over fiscal policy under Prime Minister Sanae Takaichi and concerns about intervention. Japan’s finance minister warned on Sunday that recent FX swings are “not driven by fundamentals,” though verbal interventions have had limited effect.
In commodities, oil prices rose after OPEC+ decided to maintain output levels for Q1 2026. Brent crude gained 1% to $63.03, while WTI rose 0.99% to $59.16.
AsianForexHub Quick View
- Asian stocks steady as Fed cut bets support sentiment
- Yen firms on expectations of a BOJ rate hike
- MSCI Asia ex-Japan up 23.5% YTD
- Traders price in 87% chance of a December Fed cut
- Oil rises after OPEC+ holds output steady for Q1 2026
Follow currency and commodity shifts with our real-time macro impact tracker.
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