Asian stock markets are making great profit amid growing expectations for interest rate cuts by the US Federal Reserve.
Japan’s benchmark stock market index exceeds its record high for the second day in a row, as it hopes to cut interest rates in the US and ease trade tensions between Washington and Beijing.
Nikkei 225 surpassed 43,421 points on Wednesday at its next committee in September, after better than expected US inflation data tightened cases of interest rate cuts by the US Federal Reserve.
The milestone comes after the Nikkei broke the 42,999 points mark for the first time on Tuesday.
In the US, the benchmark S&P 500 and high-tech Nasdaq composite also closed at record highs after rising 1.13% and 1.39% on Tuesday, respectively, as investors cheered for the release of the latest inflation data.
Inflation data was added to actively turn investors’ sentiment following the announcement by US President Donald Trump on Monday, a 90-day extension of his suspension on crippling tariffs on Chinese products.
Other Asian stock markets also made significant profits on Wednesday, with Hong Kong’s Hangsen Index and South Korea’s Kospi rising by around 2.50% and 1% respectively.
The Fed and its chairman Jerome Powell have been under strong pressure from Trump for months on low interest rates.
Cutting benchmark rates will boost the US economy, the biggest driver of global growth, by reducing borrowing costs for American households and businesses.
However, the Fed has been reluctant to lower fees due to concerns that could blow out inflation when Trump’s sweeping tariffs were already putting pressure on prices.
“Jerome ‘too late’ Powell now has to lower the rate,” Trump said in a true social post Tuesday, claiming that the Fed chair has caused “immense” damage to the economy by not lowering borrowing costs.
On Tuesday, CME Group’s FedWatch tool raised the chances of rate reductions in September to 96.4% from 85.9% the previous day.
