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Fed's Powell hints 25 bps cut may be last of 2025

BOJ expected to leave rates on hold for now

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ECB also seen standing pat

Trump and Xi to meet in South Korea, de-escalation expected

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U.S. tech sector earnings weigh on stocks

By Gregor Stuart Hunter

SINGAPORE, Oct 30 (Reuters) - Asian stocks fluctuated

between gains and losses early on Thursday after the Federal

Reserve cut interest rates and as investors waited to see if

U.S. and Chinese leaders will thrash out a trade deal.

MSCI's broadest index of Asia-Pacific shares outside Japan

was last trading flat, while U.S. S&P 500 e-mini

futures edged 0.1% higher after stocks on Wall Street

posted a slim loss to snap a four-day winning streak.

Global markets are in the midst of a string of central bank

decisions that will give clues about the path ahead for interest

rates as U.S. President Trump's administration imposes blanket

tariffs on foreign imports.

Trump is due to meet Chinese leader Xi Jinping in South

Korea later today. U.S. negotiators have signaled they seek a

return to a fragile trade war truce, but tensions remain high

and longer-term economic irritants will likely persist between

the geopolitical rivals.

"After a fair bit of action in the first couple days of this

week, we'll probably finish the central banking story with a bit

of a whimper in the next 24 hours, with probably not much

happening either from the BOJ or the ECB," said Sally Auld,

chief economist at National Australia Bank in Sydney in a

podcast.

The Nikkei 225 opened 0.1% lower, ahead of a

decision from the Bank of Japan later today at which the central

bank is widely expected to keep interest rates steady.

Against the yen, the U.S. dollar was last unchanged

at 152.70 yen after remarks by U.S. Treasury Secretary Scott

Bessent calling for speedier rate hikes to avoid weakening the

currency too much, which analysts said may affect the BOJ's

communication on the future pace of rate hikes.

The Federal Reserve cut interest rates on Wednesday by a

quarter of a percentage point as expected, but the U.S. central

bank's new policy statement included several references to the

lack of official data during the ongoing federal government

shutdown, and Fed Chair Jerome Powell told reporters later that

policymakers are likely to become more cautious if it deprives

them of further job and inflation reports.

Traders have slashed their forecasts of a 25-basis-point

rate cut next month, which had been viewed as a near-certainty

earlier. Fed funds futures now imply a 67.8% probability that

the Fed will hold rates at its next meeting on December 10,

compared with a 9.1% chance yesterday, according to the CME

Group's FedWatch tool.

The yield on the U.S. 10-year Treasury bond was

last trading around a three-week high of 4.0757%, up 1.77 basis

points compared with a previous close of 4.058%.

The dollar index, which measures the greenback's

strength against a basket of six currencies, climbed to a

two-week high of 99.131. Gold was last up 0.4% at

$3,944.25 per ounce.

The euro was last unchanged at $1.16035 ahead of a

policy decision by the European Central Bank later in the day at

which it is expected to leave rates on hold for a third meeting

in a row.

Elsewhere, corporate earnings season is fuelling fresh

anxiety among investors over the cost of the AI buildout, even

as the U.S. economy appears to remain in rude health, putting

pressure on tech megacap stocks that account for the biggest

weighting in the S&P 500 Index.

Meta on Wednesday forecast "notably larger" capital

expenses next year as its revenues beat market estimates, while

Microsoft's ( MSFT ) spending on artificial intelligence

infrastructure soared to a record of nearly $35 billion in the

September quarter. Shares of both companies slumped.

However, rival tech giant and Google parent Alphabet

bucked the trend, with shares rising in after-hours

trading after it beat revenue expectations.

In energy markets, Brent crude was last unchanged at

$64.92 per barrel.