Asian Markets Mixed as Traders Eye US Data, Fed Rate Cut Decision

Asian financial markets presented a mixed picture as trading wrapped up for the week, with investor focus firmly locked on upcoming economic data from the United States and a pivotal interest rate decision from the Federal Reserve.

Markets in a Holding Pattern Ahead of Key Data

Following a tepid session on Wall Street, Asian indices struggled to find clear direction on Friday, December 5, 2025. The cautious mood comes after a week where markets failed to sustain the strong gains made the previous week, which were driven by signals from central bank officials hinting at further monetary policy easing.

The optimism for lower borrowing costs has been bolstered by recent reports suggesting a softening in the US labour market. Notably, payroll firm ADP reported a loss of more than 30,000 jobs in November. Although Thursday's data on jobless claims and layoffs were slightly better than forecast, traders have overwhelmingly priced in a rate reduction. Markets currently see a 90% probability of a rate cut when the Fed meets next Wednesday.

All Eyes on the Fed's Preferred Inflation Gauge

The immediate focus for global investors shifted to the release of the Personal Consumption Expenditures (PCE) index, the Federal Reserve's favoured measure of inflation, due later on Friday. Analysts suggest that a reading below expectations could significantly boost hopes for multiple additional rate cuts throughout 2026. Data on personal income and spending is also scheduled for release.

However, significant debate persists regarding the central bank's strategy for the coming year, given that inflation continues to linger above its target. "While the US labour market is showing signs of slowing... there is a sense that it is still reasonably resilient," noted Michael Hewson of MCH Market Insights.

Hewson pointed out that key jobs data will only arrive after the Fed's decision, making another 25 basis point cut a potential "leap of faith" for some committee members. He warned that markets have already priced in a cut, meaning any delay could trigger a sharp negative reaction. Alternatively, the Fed might cut rates but then signal a pause to assess the impact of three consecutive reductions on the economy.

Market Movements and Corporate Spotlight

Wall Street's closing was muted, with the S&P 500 and Nasdaq posting minor gains while the Dow Jones dipped slightly. In Asia, Tokyo's Nikkei 225 fell over 1%, giving back some of its strong gains from Thursday. Hong Kong, Shanghai, Singapore, and Wellington also traded lower. Meanwhile, Sydney, Seoul, Taipei, Manila, and Jakarta managed to edge higher.

In notable corporate news, Chinese AI chipmaker Moore Threads Technology saw its shares skyrocket over 450% on its first day of trading in Shanghai. The company had raised $1.13 billion in its initial public offering.

Key market figures as of 0230 GMT Friday were: