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Japan, Taiwan shares set records on tech boost, Fed cut hope
The Economic Timesยท2025-09-11 05:05

Economic Outlook - The European Central Bank is expected to maintain steady interest rates but may signal the possibility of further easing due to a challenging trade and political environment [1] - The U.S. Federal Reserve is anticipated to implement three interest rate cuts this year, with a quarter-point move fully priced in for the upcoming meeting and an 8% chance of a 50 basis-point cut [5][10] Market Performance - Japan's Nikkei index rose 0.8% to reach a record high, driven by gains in technology, energy, and utility sectors [2] - Taiwanese shares increased by 1%, also setting a record, with leading chipmaker TSMC rising 2.5% and SoftBank surging nearly 9% following Oracle's significant 36% gain on Wall Street [2][9] - Nasdaq futures rose 0.2% and S&P 500 futures inched up 0.1% [4] Inflation and Consumer Prices - The U.S. Producer Price Index (PPI) reading has led to a more dovish outlook among investors, with a focus now shifting to the Consumer Price Index (CPI) for August, which is expected to show a 2.9% year-over-year increase, the largest since January [6][10] - The core CPI is anticipated to remain at 3.1%, and unless there is a significant upside surprise, the dovish sentiment is likely to persist [6][10] Bond and Currency Markets - The 10-year Treasury yield increased by 2 basis points to 4.0531%, while the 30-year yield rose to 4.7028%, having decreased over 30 basis points from a peak of 5% [8][9][10] - The U.S. dollar index remained flat at 97.81, slightly above a seven-week low, while the Australian dollar reached a 10-month high of $0.6636 before stabilizing at $0.6616 [7][8][10] Commodity Markets - Oil prices maintained gains, with U.S. crude steady at $63.65 per barrel and Brent at $67.49, following geopolitical tensions involving Poland and Russian drones [9][10] - Gold prices increased by 0.1% to $3,644 per ounce, nearing all-time highs [9][10]