SINGAPORE, Aug 22 (Reuters) – Stocks in Asia mostly clung to safe ranges on Friday as traders awaited a key speech from Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium this weekend that could shed light on the direction of monetary policy.Financial markets are looking for Powell to provide clues on the likelihood of a September rate cut in the wake of recent signs of job market weakness.
Sign up here.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab gave up early gains and was last down 0.1%, paring its advance to 1.3% so far this month.”Top of mind among investors is what central bankers will say about U.S. tariffs and their impact on economic growth and inflation, and which of these two factors will have a bigger influence on interest rate policy, as central banks grapple with the risk of stagflation,” said Vasu Menon, managing director for investment strategy at OCBC in Singapore.Defying the sleepy mood, China’s blue-chip CSI 300 Index (.CSI300), opens new tab jumped 1.8%, on track for a third consecutive day of gains. Tech shares led the advance, after DeepSeek released an upgrade to its flagship V3 AI model and Reuters reported Nvidia (NVDA.O), opens new tab had asked Foxconn (2317.TW), opens new tab to suspend work on the H20 AI chip, lending support to shares of Chinese rivals.China’s tech-focused STAR 50 index (.STAR50), opens new tab rose almost 8%.The Nikkei 225 (.N225), opens new tab veered between gains and losses, and was last down 0.1%.Japanese data showed core consumer prices slowed for a second straight month in July but stayed above the central bank’s 2% target, keeping alive expectations for a rate hike in the coming months. That did little to help the yen, though, which was poised for a 1% decline for the week. BOJ Governor Kazuo Ueda will also speak at Jackson Hole this weekend.The dollar index (.DXY), opens new tab, which tracks the greenback against a basket of currencies of major trading partners, advanced 0.2% to 98.796, as traders parsed speeches from Fed officials who appeared lukewarm to the idea of an interest rate cut next month.S&P 500 futures bobbed between gains and losses and were last trading down 0.1%. The cash gauge on Wall Street is on a five-day losing streak, which has left it on track for its biggest one-week decline this month.Traders had ramped up bets for a September cut following a surprisingly weak payrolls report at the start of this month, and after consumer price data showed limited upward pressure from tariffs.However, market pricing pulled back slightly following the release of minutes from the Fed’s July meeting. Traders are now pricing in a 73.3% probability of a cut in September, down from 82.4% on Thursday, according to the CME Group’s FedWatch tool.The most likely scenario is that Powell won’t provide “any definitive clues” on what the Fed will do next ahead of critical non-farm payrolls and CPI data, said Carol Kong, an economist and currency strategist at Commonwealth Bank of Australia in Sydney.”Given where the current market is, the risk is a stronger U.S. dollar, especially if he challenges the current market pricing of a 25-basis-point cut.”Traders are assessing signs that U.S. economic activity picked up pace in August, with PMI data from S&P Global showing the strongest growth in manufacturing orders in 18 months.But the labour market also highlighted pockets of weakness, as the number of Americans filing new applications for jobless benefits rose by the most in about three months last week and the number of people collecting unemployment relief in the prior week climbed to the highest level in nearly four years. The euro slipped, weakening 0.2% to a two-week low of $1.1585 as the EU and the U.S. set out details of a framework trade deal struck in July.Oil prices stabilised, with Brent crude last trading up 0.1% at $67.73 per barrel, following strong gains on Thursday as Russia and Ukraine blamed each other for a stalled peace process, and U.S. data showed signs of strong demand in the top oil consuming nation.Gold was slightly lower, with spot bullion off 0.3% at $3,329.40 per ounce.
Reporting by Gregor Stuart Hunter;
Editing by Shri Navaratnam and Sam Holmes
Our Standards: The Thomson Reuters Trust Principles., opens new tab
