HONG KONG – Asian stocks were mixed on Wednesday ahead of the Federal Reserve's final rate decision of this year.
U.S. futures and oil prices rose.
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Japan’s benchmark Nikkei 225 dropped 0.7% to 39,081.71 after the government reported that exports rose 3.8% in November year-on-year. Meanwhile, imports fell by 3.8%, according to data from the Ministry of Finance.
Nissan Motor Corp.’s shares jumped 23.7% after it said it was in talks on closer collaboration with Honda Motor Co., though no decision had been made on a possible merger. The latter’s shares lost 3%.
Nissan, Honda and Nissan alliance member Mitsubishi Motors Corp. agreed in August to share components for electric vehicles like batteries and to jointly research software for autonomous driving to adapt better to dramatic changes in the auto industry.
The yen gained ahead of a meeting by the Bank of Japan, which is expected to keep its benchmark rate unchanged when it provides a policy update on Friday. The U.S. dollar fell to 153.39 Japanese yen from 153.50 yen.
The Hang Seng in Hong Kong added 1% to 19,897.40 and the Shanghai Composite index gained 0.6% to 3,382.21.
In South Korea, the Kospi jumped 1.1% to 2,484.43. Australia’s S&P/ASX 200 edged 0.1% lower to 8,309.40.
On Tuesday, the S&P 500 slipped 0.4% to 6,050.61, though it’s still near its all-time high set earlier this month. The Dow Jones Industrial Average dropped 0.6% to 43,449.90, and the Nasdaq composite gave back 0.3% from its record set the day before to 20,109.06.
Across a survey of global fund managers, strategists at Bank of America found many plowing into U.S. stocks and pulling out cash reserves to do so. The survey found fund managers are holding a notably small percentage of their overall portfolios in cash, similar to 2002 and 2011, which preceded tougher times for riskier investments.
The S&P 500 is on track for one of its best years since the millennium, up nearly 27%, because the U.S. economy has remained remarkably resilient, hopes are high that President-elect Donald Trump’s policies will boost growth but not inflation too badly and the Federal Reserve has begun to make things easier by cutting interest rates from a two-decade high.
The Fed is widely expected to announce the third cut of the year to its main interest rate on Wednesday, and officials are also scheduled to unveil projections about where they see rates heading in upcoming years.
Expectations for coming cuts have been on the downswing, though, as inflation looks like it could stubbornly stick above the Fed’s 2% target after slowing sharply from its peak above 9%.
A report on Tuesday showed sales at U.S. retailers strengthened by more last month than economists expected. That could be an indication of an economy that doesn’t need much more help from easier interest rates. While lower rates can goose the economy, they can also give inflation more fuel.
Treasury yields held relatively steady following the report. The 10-year Treasury yield held at 4.40%, where it was late Monday. The two-year yield, which more closely tracks expectations for the Fed, edged down to 4.24% from 4.25%.
Bitcoin set a record above $108,000 on Tuesday before pulling back, according to CoinDesk.com. It’s catapulted from roughly $44,000 at the start of the year, riding a recent wave of enthusiasm that Trump will create a system that’s more favorable to digital currencies.
Early Wednesday it was trading at $104,272.
In other dealings Wednesday, U.S. benchmark crude oil rose 23 cents to $69.88 per barrel. Brent crude, the international standard, added 20 cents to $73.39 per barrel.
The euro rose to $1.0513 from $1.0491.