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Trump and Xi strike a deal over rare earths and tariffs

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

BOJ holds interest rates in 7-2 split decision

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Tech earnings weigh on U.S. stocks, early gains peter out

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ECB expected to stand pat later today

(Updates with Trump-Xi meeting outcome, refreshes markets)

By Gregor Stuart Hunter

SINGAPORE, Oct 30 (Reuters) - Asian stocks veered

between gains and losses on Thursday after U.S. President Donald

Trump said he had made a deal with Chinese President Xi Jinping

on rare earths and tariffs, while the yen weakened after the

Bank of Japan kept interest rates on hold.

After a near two-hour meeting with Xi, Trump said he had

agreed to reduce tariffs on imports from China in exchange for

Beijing resuming U.S. soybean purchases, keeping rare earths

exports flowing and cracking down on the illicit trade of

fentanyl.

But the immediate market reaction was choppy with

traders trying to make sense of the information released so far

and awaiting further details. China has yet to comment.

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

reversed an earlier increase of as much as 0.5%

to last trade down 0.5%, while U.S. S&P 500 e-mini futures

moved 0.1% lower as previous gains petered out.

"At the moment, the price action makes things seem like a

lot of this was already priced in," said Kyle Rodda, senior

market analyst at Capital.com in Melbourne. "Arguably the

markets were hoping for the complete removal of the fentanyl

tariff, so that could explain the ambivalence in the markets."

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

bank decisions that will give clues about the path ahead for

interest rates.

Though the Bank of Japan stood pat on rates as expected, it

repeated its pledge to continue increasing borrowing costs if

the economy moves in line with its projections.

The Nikkei 225 was last down 0.4% after the Bank of

Japan's decision. The yen reversed earlier gains against the

U.S. dollar and was last flat at 152.77 yen.

"The BOJ is tip-toeing towards a hike," said Fred Neumann,

chief Asia economist at HSBC in Hong Kong. "With October a

missed opportunity to nudge rates higher, all eyes are now on

December, when a rate hike appears likely."

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.

Those comments prompted traders to slash their forecasts for

a 25-basis-point rate cut from the U.S. central bank in

December, 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 around a three-week high of 4.066%, up 0.8 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 0.2% at 98.98. Gold was last up 0.8%

at $3,960 per ounce.

The euro was last 0.3% firmer at $1.1628 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 overturned a gain of as

much as 1.6% after Trump and South Korean President Lee Jae

Myung finalised details of a trade deal, and was last trading

0.2% lower.

Shares in Samsung Electronics ( SSNLF ) surged 3.4% 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

$64.59 per barrel.