Asian Markets Show Mixed Results as Investors Await Crucial US Inflation Data Set to Finalize Bets on Next Week’s Federal Reserve Rate Cut

Asian stock markets traded with mixed results today, Friday, December 5, 2025, as investors struggled for a firm direction ahead of critical economic data from the United States that is expected to seal the fate of the Federal Reserve’s monetary policy decision next week. The trading session saw the regional benchmark index finish marginally lower, following a bland overnight lead from Wall Street.

The market mood remains dominated by strong expectations that the US central bank will deliver a 25-basis-point interest rate cut at its meeting scheduled for December 10. Markets are currently pricing in a probability of approximately 90% for the cut, which would be the third in a sequence aimed at mitigating downside risks to the US labor market.

In regional trading, performance was notably divergent. The Nikkei 225 in Japan was the main laggard, falling by 1.1% after fresh government data revealed that household spending in the country fell by 3.0% in October, the sharpest drop in nearly two years, suggesting consumer caution due to inflation. Conversely, the Hong Kong Hang Seng Index rose 0.6%, and South Korea’s Kospi experienced a significant jump of 1.8%, reflecting localized buying interest and positive sentiment toward technology stocks.

All eyes are now fixed on the release of the US Personal Consumption Expenditures (PCE) Price Index later today, the Federal Reserve’s preferred measure of inflation. Investors believe a lower-than-forecast reading of the PCE index would solidify the case for a December rate cut and potentially fuel hopes for further monetary easing throughout 2026. The high confidence in the impending rate cut has already weakened the US Dollar to multi-week lows, impacting global currency and commodity markets.