Asian shares traded mostly lower on Wednesday following a mixed finish on Wall Street. Investors were closely monitoring the U.S. presidential debate between Vice President Kamala Harris and former President Donald Trump for any potential market impact.
The U.S. dollar has seen an increase against its peers, a trend that typically occurs when expectations for a Trump reelection strengthen. This movement, known as the 'Trump trade,' has been influenced by factors such as his advocacy for tariffs.
In currency trading, the U.S. dollar fell to 141.72 Japanese yen from 142.41 yen, while the euro rose to $1.1036 from $1.1023.
Japan's Nikkei 225 lost 0.8%, Australia's S&P/ASX 200 dropped 0.3%, and South Korea's Kospi slipped 0.2% after data revealed a decrease in the nation's unemployment rate to 2.4% in August 2024.
Meanwhile, Hong Kong's Hang Seng fell 1.5% and the Shanghai Composite slipped 0.8%. On Wall Street, the S&P 500 rose 0.4%, nearing its record set in July, while the Dow Jones Industrial Average fell 0.2% and the Nasdaq composite gained 0.8%.
Big Tech stocks drove indexes higher, but bank issues weighed on the market following negative comments from industry executives. In the bond market, Treasury yields eased, with the 10-year Treasury yield dropping to 3.64%.
Market volatility is expected ahead of the Federal Reserve's meeting next week, where a rate cut is anticipated. The Fed is shifting focus towards supporting the economy, with debates centered on the extent of the upcoming rate cut.
Reports on U.S. inflation due this week could impact the Fed's decision. Economists predict a 2.6% increase in consumer prices for August, a slight slowdown from July's 2.9% inflation rate.
In energy trading, benchmark U.S. crude rose to $66.21 a barrel, while Brent crude gained to $69.62 a barrel.
