Investing.com-- Most Asian stocks edged higher on Wednesday tracking overnight rise on Wall Street, but gains were limited as investors remained cautious ahead of key U.S. inflation data, particularly in light of the Federal Reserve's hawkish stance in December.
U.S. stock index futures were higher in Asian trade on Wednesday. Market participants’ focus was on a key inflation reading due later in the day to assess the Fed’s interest rate outlook for 2025.
The Fed had signaled fewer rate cuts in 2025 during its December meeting, citing sticky inflation.
Asia shares see marginal moves ahead of US CPI
Traders are exhibiting caution ahead of the upcoming U.S. Consumer Price Index (CPI), resulting in marginal moves across the region.
Japan’s Nikkei 225 index rose 0.3%, while TOPIX gained 0.6% on Wednesday.
Australia’s S&P/ASX 200 was largely unchanged. Investors await December employment data due on Thursday.
China’s Shanghai Shenzhen CSI 300 index edged 0.2% lower, and the Shanghai Composite index was largely unchanged, while Hong Kong’s Hang Seng index inched up 0.1%.
Focus this week will be on several key economic indicators that will provide insights into China’s economic performance at the close of 2024. The country’s full-year 2024 Gross Domestic Product (GDP) figures are due on Friday. Additionally, December's industrial production data, and retail sales figures are also due on Friday.
Elsewhere in Asia, stock indexes fell with Thailand’s SET Index falling more than 1%. Singapore’s Straits Times Index fell 0.3%, while Malaysia’s KLCI index dropped 0.7%.
India's Nifty 50 Futures were slightly lower on Wednesday.
Asian shares are facing additional downward pressure from prospects of fewer Fed rate cuts in 2025. Markets now anticipate just one rate cut this year, a sharp adjustment from the earlier expectation of four cuts before the Fed’s December meeting, according to Fedwatch.
South Korean President Yoon arrested over martial law
South Korea’s impeached President Yoon Suk Yeol was arrested on Wednesday over his failed attempt to enforce military law in late 2024, according to local media reports.
The KOSPI index edged up 0.3%.
The Bank of Korea is expected to lower its base rate by 25 basis points on Thursday, advancing the move by a month, to support South Korea's struggling economy amid heightened political uncertainty, according to a Reuters poll.