Asia-Pacific equities advance as traders raise bets on a December Fed rate cut

Asia-Pacific share markets climbed on Wednesday, following a positive U.S. session and growing expectations that the Federal Reserve will lower interest rates in December.

Optimism intensified after a Bloomberg report indicated that White House National Economic Council Director Kevin Hassett has emerged as the leading contender to become the next Fed chair, a move investors view as potentially tilting the central bank toward a more accommodative stance favored by President Donald Trump. Separately, Treasury Secretary Scott Bessent told CNBC on Tuesday that the administration has a “very good chance” of naming a new Fed chief before Christmas.

Based on the CME FedWatch Tool, futures pricing placed the probability of a December rate cut above 84% during the Asia trading day. New York Fed President John Williams added to the dovish tone on Friday, saying there remains scope to lower rates “in the near term.”

Japan leads regional rally

Japan’s Nikkei 225 surged 1.94%, spearheaded by gains in utilities, healthcare and financial stocks. Printing company Toppan Holdings advanced 7.54%, investment conglomerate SoftBank Group rose 6.89% and pharmaceutical firm Otsuka Holdings climbed 6.84%.

Semiconductor-related names extended Tuesday’s momentum. Chip-testing equipment supplier Advantest added 2.54%, while Tokyo Electron firmed 0.61%. Lasertec and Renesas Electronics gained more than 2% and 1%, respectively. The broader Topix index improved 0.9%.

The upbeat mood was tempered by a sharp sell-off in memory-chip maker Kioxia. Shares fell more than 12% after Nikkei reported late Monday that Bain Capital plans to sell roughly ¥350 billion (US$2.24 billion) of its stake, reducing the private-equity firm’s combined holding to 44% from 51%. Kioxia had already slumped 23.03% on Nov. 14 after issuing second-quarter results and guidance that lagged analyst forecasts.

South Korea, Australia and Greater China post moderate gains

South Korea’s Kospi climbed 1.83%, while the tech-heavy Kosdaq added 1.69%. In Taiwan, the Taiex advanced 1.4%, buoyed by a 2% rise in Hon Hai Precision Industry, known globally as Foxconn. The contract manufacturer said the Wisconsin Economic Development Corporation approved a contract amendment providing up to US$16 million in additional performance-based tax incentives as Foxconn plans to invest a further US$569 million in Racine County.

Australia’s S&P/ASX 200 rose 0.86%. The Australian Bureau of Statistics reported that consumer prices increased 3.8% year on year in October, the fastest pace since the nation adopted a new headline inflation measure in April and the quickest in seven months overall.

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In Greater China, Hong Kong’s Hang Seng Index added 0.22%, and the mainland CSI 300 edged up 0.41%. Hong Kong-listed shares of Alibaba Group slipped 1.27% after the company’s fiscal second-quarter results showed adjusted EBITA falling 78% from a year earlier, weighed by its instant-commerce segment, although revenue exceeded market projections.

Wall Street rebound underpins sentiment

Overnight in the United States, major equity benchmarks finished higher after a volatile session. The Dow Jones Industrial Average gained 664.18 points, or 1.43%, to close at 47,112.45. The S&P 500 advanced 0.91% to 6,765.88, and the Nasdaq Composite increased 0.67% to 23,025.59.

The session marked a recovery from early declines that saw the S&P 500 down roughly 0.7% and the Dow and Nasdaq fall more than 0.2% and 1%, respectively. Investors rotated back into equities as the likelihood of near-term monetary easing rose.

Market outlook

With expectations for a December rate cut now firmly embedded in futures prices, traders across the Asia-Pacific region are monitoring upcoming U.S. economic data and any official commentary that could either reinforce or challenge the prevailing view. The prospect of a new Fed chair perceived as supportive of lower borrowing costs remains a central focus, alongside domestic factors such as Australia’s quicker inflation print and sector-specific developments like Bain Capital’s planned share sale of Kioxia.

Crédito da imagem: Visual China Group via Getty Images