Asian markets rally with Wall St as rate hopes rise, AI fears ease
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
HONG KONG: Asian markets rallied on Monday (Dec 22) and gold hit a record high as the latest round of United States data boosted hopes for more interest rate cuts, while worries over AI spending also subsided.
Investors were back in the saddle for the final business days before Christmas, having had a minor wobble earlier in the month on concerns that the Federal Reserve would hold off easing monetary policy further in the early part of 2026.
Figures last week showing US unemployment hit a four-year high in November came as a report indicated the rise in consumer prices slowed more than expected.
That stoked bets on the Fed lowering borrowing costs early next year. Investors had pared their forecasts after the bank indicated it could take a pause on further cuts in its post-meeting statement earlier this month.
Subscribe to CNA’s Morning Brief
An automated curation of our top stories to start your day.
This service is not intended for persons residing in the E.U. By clicking subscribe, I agree to receive news updates and promotional material from Mediacorp and Mediacorp’s partners.
Loading
"This labour market softening and inflation moderation strengthened Federal Reserve easing expectations for 2026," wrote IG market analyst Fabien Yip.
However, she added that "the low inflation reading may prove temporary as shutdown-related data collection disruptions likely suppressed the figure, which could normalise higher once data gathering processes resume".
Asian tech firms led the gains on Monday with South Korea's Samsung Electronics, Taiwan's TSMC and Japan's Renesas among the best performers.
Hong Kong, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei and Manila all enjoyed healthy advances.
Tokyo was the standout, piling on 2 per cent thanks to a weaker yen.
Gold, which benefits from lower US interest rates, hit a fresh record above US$4,388, while silver also struck a new peak.
The precious metals, which are go-to assets in times of crisis, also benefited from geopolitical worries as Washington steps up its oil blockade against Venezuela and after Ukraine hit a tanker from Russia's shadow fleet in the Mediterranean.
Stephen Innes at SPI Asset Management said: "Asian equity markets are stepping onto the floor with a constructive bias, taking their cue from Friday's solid rebound in US stocks and the growing belief that the final stretch of the year still belongs to the bulls".
The equity gains tracked a surge on Wall Street led by the Nasdaq as technology giants following a bumper earnings report from chip giant Micron Technology that reinvigorated the AI trade.
That came on top of news that Oracle will take a 15 per cent stake in a TikTok joint venture that will allow the social media company to maintain operations in the United States.
The tech bounce came after a bout of selling fuelled by concerns that valuations had been stretched and questions were being asked about the vast sums invested in artificial intelligence that some warn could take time to see returns.
Forex traders are keeping tabs on Tokyo after Japan's top currency official said he was concerned about the yen's recent weakness, which came after the central bank hiked interest rates to a 30-year high on Friday.
"We're seeing one-directional, sudden moves especially after last week's monetary policy meeting, so I'm deeply concerned," Atsushi Mimura said on Monday.
"We'd like to take appropriate responses against excessive moves."
The comments stoked speculation that officials could intervene in currency markets to support the yen, which fell more than 1 per cent against the dollar on Friday after bank boss Kazuo Ueda chose not to signal more increases early in the new year.
Newsletter
Morning Brief
Subscribe to CNA’s Morning Brief
An automated curation of our top stories to start your day.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app