Asia stocks reverse gains after Trump-Xi meet; BOJ rate hold, Fed cut in focus

Updates at 05:55 GMT with latest price moves, additional information on Trump-Xi talks

Investing.com-- Asian shares gave up early gains on Thursday after a closely watched meeting between U.S. President Donald Trump and Chinese President Xi Jinping failed to provide concrete details on trade progress.

Attention turned to the Bank of Japan rate decision, while the Federal Reserve’s cautious signals on future rate cuts weighed on investor sentiment.

Major Wall Street indexes ended with tepid moves overnight, while futures tied to them were largely unchanged in Asian trading as of 05:40 GMT.

BOJ holds rates steady as expected; Nikkei at record high

The Bank of Japan held its short-term interest rate at 0.5%, in line with market expectations, while reiterating that future hikes remain contingent on economic conditions.

The Nikkei 225 edged 0.1% lower, after rising as much as 0.8% to a fresh record high of 51,638.0 points. The broader TOPIX index remained 0.6% higher.

Investor optimism was fueled by domestic inflation above target and hopes for ongoing policy support, with the central bank adopting a patient stance amid sticky inflation and a weak yen.

Trump-Xi meeting ends without concrete trade details

Markets turned negative as Trump-Xi talks failed to provide concrete details on a possible U.S.-China trade agreement.

Trump highlighted a “great relationship” between the two leaders, while Xi said both sides had reached “a basic consensus” despite persisting differences, reports stated.

After talks concluded, He said a deal could be signed “pretty soon", adding that the two sides had reached broad agreements on most major issues and would finalize the details shortly.

However, the lack of details and Trump’s previous rhetoric regarding China made investors cautious about the certainty of a deal.

China’s blue chip Shanghai Shenzhen CSI 300 and the Shanghai Composite index just ticked down 0.2% each.

Hong Kong’s Hang Seng index reversed course to tick 0.1% lower.

South Korea’s KOSPI trimmed gains to trade 0.3% higher after jumping as much as 1.2% in early trade.

Fed’s cautious tone limits upside

Meanwhile, the Fed lowered its benchmark rate by 25 basis points to a range of 3.75%-4.00% on Wednesday, marking its third cut this year.

But Chair Jerome Powell tempered market expectations for another move in December, saying a further reduction was “far from a foregone conclusion.” His remarks signaled that policymakers remain divided and dependent on upcoming inflation and jobs data.

Australia’s S&P/ASX 200 slipped 0.5% on Thursday, while Singapore’s Straits Times Index fell 0.4%.

India’s Nifty 50 fell 0.3%.