Asia markets rebound on Powell's dovish signal, but U.S.-China tensions keep sentiment fragile

Asia stocks trade higher on Wednesday, recovering from steep losses incurred earlier in the ￰0￱ relief rally was primarily driven by dovish comments from Federal Reserve Chair Jerome Powell and positive corporate earnings in the ￰1￱ were comforted by Powell's remarks on Tuesday, where he acknowledged the U. S. economy's "firmer footing" but raised a caution about a "notably softer labor market." Despite the rally, sentiment remains fragile due to renewed U. S.-China trade tensions, after President Trump threatened Beijing with a cooking oil embargo in response to China’s soybean boycott.

meanwhile, the euro advanced after France proposed suspending major pension reforms, while the yen strengthened as traders unwound the “Takaichi trade.” Adding to the optimism, the IMF raised South Korea’s 2025 growth forecast to 0.9%, citing a smaller-than-expected impact from recent US tariff measures and resilience in ￰2￱ climbed back above $52 per ounce on Wednesday, holding close to record highs hit in the prior session as a global supply crunch fueled a historic ￰3￱ prices climbed to around $4,180 per ounce on Wednesday, extending its bullish run to notch a fresh ￰4￱ ( NKY:IND ) rose 1.71% to above 47,000 while the broader Topix Index gained 0.8% to 3,160 on ￰5￱ Japanese yen strengthened toward 151 per dollar on Wednesday, rising for the second straight session as markets remain uncertain whether ruling Liberal Democratic Party leader Sanae Takaichi will become the next prime minister following the coalition split with the Komeito ￰6￱ parties are also holding talks today to secure enough backing to form a new government.

Japan’s industrial production contracted 1.5% month-over-month in August 2025, steeper than the flash data of a 1.2% fall, which was also July's ￰7￱ ( SHCOMP ) rose 0.49% to above 3,870, while the Shenzhen Component advanced 0.9% to 13,000 on Wednesday, rebounding from the previous session’s losses, and the offshore yuan rose to around 7.12 per dollar on Wednesday, snapping a three-session decline, as the People’s Bank of China reaffirmed its commitment to maintaining currency stability. China's consumer prices dropped 0.3% y/y in September 2025 , steeper than market estimates of a 0.1% decline but slightly less than a 0.4% fall in the previous month.

Meanwhile, China’s producer prices fell 2.3% year-on-year in September 2025, easing from a 2.9% drop in the previous ￰8￱ a separate release, Premier Li Qiang reiterated calls to boost consumption and curb unfair competition among ￰9￱ the trade front, sentiment remained cautious after President Trump threatened Beijing with a cooking oil embargo in response to China’s soybean ￰10￱ Kong ( HSI ) rose 1.35% to 25,774 around noon on Wednesday, snapping a seven-session losing streak amid broad strength across ￰11￱ ( SENSEX ) rose 0.53% to 82,361 in morning trade on Wednesday, snapping a two-day losing ￰12￱ International Monetary Fund has raised India’s growth forecast to 6.6% from 6.4% for FY2025/26, as the country’s strong growth momentum is expected to offset the impact of high US tariffs on Indian ￰13￱ sentiment was also boosted by India’s headline inflation data for September, which came in below the RBI's target range, raising hopes of a rate cut at the December policy ￰14￱ ( AS51 ) rose 1.03% climbed 0.9% to above 8,975 on Wednesday, marking its strongest daily gain in almost two ￰15￱ Australian dollar appreciated to around $0.650 on Wednesday, recovering some of the prior session’s ￰16￱ Governor Sarah Hunter noted that recent economic data has been slightly stronger than anticipated, indicating inflation in the third quarter may exceed earlier ￰17￱ Westpac-Melbourne Institute Leading Economic Index for Australia was unchanged in September 2025, following a 0.1% decline in the previous ￰18￱ Bank of New Zealand Chief Economist Paul Conway said the official cash rate of 2.5% is at the lower end of the neutral range, but the MPC remains open to further rate cuts if ￰19￱ the ￰20￱ Tuesday, all three major indexes ended mixed as investors balanced mostly positive bank earnings, Federal Reserve comments, and ongoing US-China trade tensions ￰21￱ futures stabilized on Wednesday after the major averages swung sharply in the previous session: Dow +0.30% ; S&P 500 +0.46% ; Nasdaq +0.67% .

Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: China CPI falls beyond forecast amid steeper food price; PPI deflation continues for 36th month China's exports surge to six-month high, driving September trade surplus to $90.45B Stock index futures rebound as Trump downplays China rift Japan's producer prices rises more than expected in September to 2.7% ￰22￱ 29 companies in China, Turkey, and UAE over Iran military support China tightens export rules for crucial rare earths and related technology