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(Bloomberg) -- Asian shares turned higher, shrugging off Wall Street’s modest declines as traders braced for the Federal Reserve’s final policy decision of the year.
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A gauge of regional stocks rose 0.3%, led by gains in Hong Kong, mainland China and South Korea. Japanese equities fluctuated. US futures were steady after both the S&P 500 and Nasdaq 100 shed 0.4% Tuesday.
Shares of Nissan Motor Co. rose as much as 24%, the most since at least 1974, on news the ailing carmaker is exploring a possible merger with Honda Motor Co. The latter’s stock dropped.
Bloomberg’s dollar gauge was little changed. The yen drifted lower ahead of the Bank of Japan’s policy decision Thursday. Treasuries were steady in Asia.
While the Fed is widely expected to cut interest rates by another 25 basis points later Wednesday, the focus is on its outlook for next year given Donald Trump’s proposed policies that may rekindle inflation. The central bank’s meeting also comes as US economic data showed a mixed picture, with retail sales increasing at a firm pace and industrial production unexpectedly declining.
“In the absence of surprising news, possibly from China’s policymakers, the day’s trade may be lackluster,” said Kyle Rodda, a senior market analyst at Capital.Com. “Ultimately, the next move for equity markets depends on what happens at the FOMC meeting, with a so-called Santa rally living and dying on the central bank’s commentary, guidance and projections.”
Bank of America Corp. sees the Fed lowering interest rates to the 3.75% level — or three more cuts from where they are currently, Chief Executive Officer Brian Moynihan said on Bloomberg Television.
“They need to bring it down a little bit, they just have to be more careful because the economy is stronger than we thought three months ago, six months ago but still has potential weaknesses” he said. “We haven’t even talked about what is going on outside the United States that could affect it — not tariffs but wars.”
Back in Asia, a gauge of Hong Kong-listed Chinese tech stocks rose over 1%, shrugging off news that the US is set to initiate a trade investigation into the country’s semiconductors in the coming days. The onshore CSI 300 Index also gained 0.5%, after President Xi Jinping urged officials to “scientifically” plan economic and social development work for 2025 and seek a good start for the new year.