Asian Markets Surge to Highest Point in Asia on Fed Rate Cut Bets; Crypto Joins Rally

Market Overview: Risk-On Sentiment Dominates

Thursday’s trading session painted a bullish picture across Asia-Pacific markets, with equities climbing on the back of strengthening expectations for a December Federal Reserve rate cut. The MSCI Asia-Pacific Index (ex-Japan) jumped 0.27%, while Japan’s Nikkei and South Korea’s Kospi delivered stronger performances, each gaining over 1%. This uptrend signals the highest point in Asia’s trading week as investors pivot toward risk assets amid shifting monetary policy signals.

The dollar weakened notably during the session, with the dollar index trading near 99.523 after a 0.28% decline the previous day. The euro reached its strongest level in over a week at 1.16045, while sterling climbed to $1.3247—a one-month peak following the UK budget announcement that eased fiscal concerns.

Bitcoin Breaking Out: Crypto Market Eyes Fresh Momentum

Cryptocurrency markets showed robust participation, with Bitcoin reclaiming the $90,000 level and posting nearly 3% gains on Thursday. The move positions digital assets to snap a four-week losing streak, signaling renewed investor confidence in risk-on trades. Alongside Bitcoin’s recovery, the entire crypto complex appears poised for a potential breakout, particularly if equity markets maintain their bullish trajectory through December.

Why the Fed Rate Cut Narrative Matters

The surge in rate-cut expectations has become the primary driver of current market sentiment. CME FedWatch data reveals traders are now pricing in an 85% probability of a Fed rate reduction next month—a dramatic shift from just 30% probability recorded seven days prior. This repricing reflects recent comments from San Francisco Fed President Mary Daly and Fed Governor Christopher Waller, both signaling openness to monetary easing.

The catalyst behind this shift stems from U.S. labor market data that arrived softer than expected. New jobless claims fell to a seven-month low, yet the headline figures suggest underlying vulnerabilities that could warrant policy accommodation despite persistent inflation above target. Market breakeven inflation rates around 2.25% indicate traders view the inflation trajectory as manageable, allowing room for rate cuts without sparking fresh price pressures.

Asia’s Capital Markets Navigate Policy Crosswinds

While the Fed leans dovish, Japan’s monetary authorities face opposing pressures. The Bank of Japan is reportedly preparing a potential rate hike as early as next month, a move aimed at stabilizing the yen following its near-10% depreciation since October. The yen edged to 156.16 per dollar as traders watched for official intervention signals.

China’s property sector remains a focal point of concern. State-backed developer China Vanke is seeking bondholder approval to postpone repayment on a 2 billion yuan ($282.6 million) bond—marking the firm’s first extension request and triggering fresh worries about debt sustainability in the sector.

Positioning for December’s Critical Decisions

The holiday-shortened week in North America (Thanksgiving closure) has compressed trading volumes, yet conviction appears strong around the anticipated December Fed decision. Combined with potential BoJ policy tightening and ongoing China property concerns, markets face a complex backdrop where regional policy divergence could create opportunities for astute traders. Bitcoin’s recovery and equity strength suggest investors are favoring growth-sensitive bets in anticipation of looser U.S. monetary conditions—making this period pivotal for the highest point in Asia’s near-term market psychology.

Gold prices held steady at $4,164.81 per ounce, reflecting a balanced backdrop where traditional safe-haven demand remains measured against risk appetite.