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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 meeting in South Korea, de-escalation expected

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U.S. tech sector earnings weigh on stocks

(Updates markets, Trump-Xi meeting, new quote, Samsung

earnings)

By Gregor Stuart Hunter

SINGAPORE, Oct 30 (Reuters) - Asian stocks advanced in

morning trading on Thursday after the Federal Reserve cut

interest rates and U.S. and Chinese leaders met to thrash out a

trade deal, with the Bank of Japan also due to decide on

interest rates imminently.

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

was last up 0.5%, while U.S. S&P 500 e-mini

futures moved 0.4% 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 the Trump administration imposes blanket tariffs on

foreign imports.

"There's a stack to digest, and the Bank of Japan decision

shouldn't be forgotten as something that could rock the region

should they say or do something hawkish today," said Kyle Rodda,

senior market analyst at Capital.com in Melbourne.

"The U.S.-China trade deal could reignite animal spirits

although I suspect that with the rally we've had this week on

Wall Street, and the boost that's given the Asian region, a lot

of the good news is priced in."

U.S. President Donald Trump is currently meeting Chinese

leader Xi Jinping in South Korea. U.S. negotiators have

signalled 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 fluctuated between gains and losses

and was last 0.1% higher ahead of a decision from the Bank of

Japan on Thursday at which the central bank is widely expected

to keep interest rates steady.

Against the yen, the U.S. dollar was last 0.2% weaker

at 152.455 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 on Wednesday, 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 4.068%, up 1 basis

point compared with a previous close of 4.058%.

The dollar index, which measures the greenback's

strength against a basket of six currencies, edged back from a

two-week high, down 0.1% at 99.032. Gold was last up 0.2%

at $3,937.19 per ounce.

The euro was last 0.1% firmer at $1.1617 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, the KOSPI index jumped 1.1% after Trump

and South Korean President Lee Jae Myung finalised details of

their trade deal.

Shares in Samsung Electronics ( SSNLF ) surged 4.3% after

it reported on Thursday a 32% rise in third-quarter operating

profit.

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 down 0.5% at

$64.62 per barrel.