Asia-Pacific markets are set to open higher on Tuesday, after Federal Reserve Chair Jerome Powell indicated the recent outsized cuts enacted by the U.S. central bank should not be interpreted as a sign that future moves will be as aggressive.
“This is not a committee that feels like it’s in a hurry to cut rates quickly,” he said during a Q&A period following his speech with Morgan Stanley economist Ellen Zentner. “If the economy performs as expected, that would mean two more rate cuts this year, a total of 50 [basis points] more.”
The current federal funds rate stands at 4.75%-5%, with the expected additional 50 basis points in cuts set to take the Fed’s benchmark interest rate to 4.25%-4.5% at the end of 2024.
In Asia, traders will focus on the Bank of Japan’s Tankan survey, which measures the level of business optimism among large Japanese companies. The quarterly survey measures economic conditions in Japan and is considered a key economic indicator.
Japan will also report its unemployment rate for August, which is expected by economists polled by Reuters to come in at 2.6%, down from 2.7% in July.
Some Asian markets are closed for a public holiday, namely, South Korea, Hong Kong and mainland China. Mainland China will be closed for the rest of the week, due to the Golden Week holiday.
Futures for Australia’s S&P/ASX 200 stood at 8,274, slightly higher than its last close of 8,269.8.
Japan’s Nikkei 225 futures pointed to a rebound after the market tumbled 4.8% on Monday, with the futures contract in Chicago at 38,355 and its counterpart in Osaka at 38,210 compared to the previous close of 37,919.55.
Overnight in the U.S., the S&P 500 rose to a record close on Monday, concluding a winning month and quarter. The index recorded a 0.42% gain to close at 5,762.48.
The Dow Jones Industrial Average also closed at a new record, gaining marginally to close at 42,330.15. The tech heavy Nasdaq Composite advanced 0.38%
—CNBC’s Alex Harring and Hakyung Kim contributed to this report.