Asian and European markets moved in opposite directions on Friday as investors braced for a crucial speech from US Federal Reserve Chairman Jerome Powell at Jackson Hole.
He is expected to signal whether the Fed will cut interest rates as early as September.
Inflation And Politics Shape Sentiment
In recent days, trading has slowed as inflation worries unsettled markets.
At the same time, the technology sector — led by artificial intelligence — has continued to rally.
Meanwhile, President Donald Trump increased pressure on Powell this year by openly urging him to lower rates, an unusual challenge to the Fed’s independence.
Asia Shows Mixed Gains
In Asia, Tokyo’s Nikkei inched up 0.1% after Thursday’s decline, helped by new data.
Japan’s core inflation slipped to 3.1% in July from 3.3%, which still stayed above the central bank’s two per cent target.
As a result, traders now expect the Bank of Japan to raise rates in October.
At the same time, Shanghai’s benchmark jumped 1.5%, breaking 3,800 points for the first time in a decade.
Semiconductor giant Cambricon led the rally as its shares surged sharply.
Hong Kong, Seoul and Bangkok followed with gains, while Sydney and Taipei moved lower.
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Europe Cautious, Oil Edges Higher
Moving to Europe, shares opened mixed.
London and Frankfurt edged down, but Paris managed a slight rise.
Analysts stressed that sentiment remains cautious until Powell speaks.
“There is a very low probability of him calling explicitly for rate cuts,” said Chris Weston of Pepperstone.
However, he argued that Asia “may act as a safe harbour” while global investors test the Fed’s credibility.
Beyond monetary policy, geopolitics weighed heavily on investors.
Talks over Ukraine’s future gained momentum more than three years after Russia’s invasion.
President Trump set a two-week deadline to evaluate negotiations after meeting Russian, Ukrainian and European leaders.
Because of this, speculation grew that sanctions on Russia — a key oil supplier — might eventually ease.
As a result, oil prices extended gains on Friday, adding to earlier increases.
Key figures (Friday close):
- Tokyo – Nikkei 225: +0.1% at 42,633.29
- Hong Kong – Hang Seng: +0.9% at 25,339.14
- Shanghai – Composite: +1.5% at 3,825.76
- London – FTSE 100: –0.1% at 9,300.77
- Pound/dollar: $1.3410 (down from $1.3412)
- Dollar/yen: ¥148.60 (up from ¥148.37)
- Euro/pound: 86.45p (down from 86.52p)
- WTI crude: +0.2% at $63.66 a barrel
- Brent crude: +0.2% at $67.78 a barrel
- New York – Dow Jones: –0.3% at 44,785.50
