Asian shares were mixed as investors remained cautious ahead of the Federal Reserve's interest rate decision. Heightened tensions between Japan and China weighed on sentiment. Japan and Australia called for calm following a Chinese military aircraft's radar lock on Japanese jets.
Asian stock markets showed mixed results as investors proceeded cautiously before the Federal Reserve's interest rate decision this week. U.S. futures and oil prices rose amid the uncertainty. Flaring tensions between Japan and China also dampened sentiment, with traders staying alert.
Tokyo's Nikkei 225 index fell 0.2% to 50,581.94 following revised government data indicating Japan's economy contracted at an annual 2.3% pace in July-September, up from the earlier 1.8% estimate. Exports were hit by U.S. President Donald Trump's tariffs, and public investments declined.
Chinese markets diverged, with Hong Kong's Hang Seng dropping 0.9% to 25,841.21, while the Shanghai Composite rose 0.6% to 3,926.47. China's November exports increased 5.9% year-on-year, exceeding $1 trillion for the year, though U.S.-bound shipments fell 29%, offset by other destinations. South Korea's Kospi gained 1.3% to 4,154.85, Taiwan's benchmark climbed 1.2%, and Australia's S&P/ASX 200 dipped 0.1% to 8,624.40.
On Friday, the S&P 500 rose 0.2% to 6,870.40, nearing its October record close. The Dow added 0.2% to 47,954.99, and Nasdaq gained 0.3% to 23,578.13. Ulta Beauty surged 12.7% on strong quarterly results, while Victoria’s Secret soared 18% after a smaller-than-expected loss. Warner Bros. Discovery climbed 6.3% following reports of a $72 billion Netflix acquisition.
Traders expect the Fed to cut its key rate Wednesday, the third reduction this year, to support the slowing U.S. job market. September's preferred inflation gauge held at 2.8%, as forecasted. Consumer inflation expectations dropped to 4.1% for the coming year, the lowest since January. Benchmark crude rose to $60.22 per barrel for WTI and $63.86 for Brent. The dollar eased to 155.26 yen.
The Japan-China friction stemmed from a Chinese military aircraft locking radar on Japanese fighter jets. Defense Minister Shinjiro Koizumi called it “an extremely regrettable” and “a dangerous” act exceeding safe operations. Prime Minister Sanae Takaichi's Taiwan remarks had earlier irked Beijing. Japan and Australia urged calm on Sunday.