Asian Markets Hit Highest Point in Asia This Week; Traders Betting Big on Fed Pause

The Asian equity rally is pushing regional indices to their highest point in Asia in weeks, as market participants overwhelmingly price in a December Fed rate cut. Bitcoin has rebounded to the $87.71K level, while the weakening dollar keeps currency traders on their toes across the region.

Regional Stock Surge Powers Through Profit-Taking Week

Asian equities climbed sharply on Thursday, with the MSCI Asia-Pacific Index excluding Japan gaining 0.27%—not much on paper, but enough to signal a potential breakout from a three-week downtrend. Japan’s Nikkei and South Korea’s Kospi both surged over 1%, reflecting strong investor appetite for risk assets. The shortened trading week around the Thanksgiving holiday has kept volumes subdued, yet momentum remains decidedly positive as traders look ahead to the Fed’s next move.

The rally comes as fresh economic data and Fed communications have fundamentally shifted market expectations. Labor market resilience—evidenced by jobless claims hitting a seven-month low—has paradoxically convinced traders that the central bank can afford to cut rates without endangering employment. CME FedWatch is now showing an 85% probability of a December rate reduction, a dramatic jump from just 30% a week prior.

Chinese Property Woes Weigh on Sentiment

Despite the broader optimism, the Chinese property sector remains a pressure point. Developer China Vanke is seeking bondholder approval to defer payment on a 2 billion yuan ($282.6 million) onshore bond—marking the first such extension for the state-backed firm. The move has reignited concerns across financial and property circles, serving as a reminder that regional growth challenges persist beneath the surface of rising stock indices.

Fed Expectations Reshape Currency and Commodity Markets

The dollar has softened noticeably, with the dollar index hovering at 99.523 following a 0.28% decline. Meanwhile, the euro reached its highest point in over a week at 1.16045, while sterling appreciated to $1.3247—a one-month high buoyed by UK Finance Minister Rachel Reeves’ budget presentation, which eased fiscal concerns.

The Japanese yen has drawn particular scrutiny, appreciating slightly to 156.16 per dollar as traders remain cautious about potential intervention from Japanese authorities. Since early October, the yen has depreciated by nearly ten units amid government spending pressures, but reports suggest the Bank of Japan may support a rate hike as soon as next month to stabilize the currency—a critical development for regional exporters.

Cryptocurrencies and Commodities in Transition

Bitcoin has bounced back above $87.71K, gaining roughly 3% on Thursday and threatening to end a four-week losing streak. The recovery reflects broader risk-on sentiment as investors rotate back into growth-oriented assets. Gold prices, by contrast, have flatlined at $4,164.81 per ounce after a modest 0.8% gain in the previous session—a sign that safe-haven demand remains muted as long as the rate-cut narrative holds.

The Bottom Line

Asia’s highest point in Asia this trading week reflects a market betting heavily on Fed accommodation. Yet with Chinese property concerns simmering and currency dynamics remaining sensitive to intervention risks, traders should remain vigilant for any shifts in central bank rhetoric or economic data that could reshape these expectations.