Asian Stocks Tumble After U.S. Market Slump

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Asian stock markets experienced declines following a sharp drop in U.S. shares. The Federal Reserve's indication of fewer rate cuts in 2025 than previously anticipated contributed to the U.S. market downturn. While the Fed lowered its key rate as expected, other major central banks, including the Bank of Japan, maintained their current rates. The weaker yen against the dollar raised concerns about inflation in Japan, prompting analysts to predict a possible Bank of Japan rate hike in January.

BANGKOK — Shares skidded Thursday in Asia after U.S. stocks tumbled to one of their worst days of the year when the Federal Reserve hinted it may deliver fewer rate cuts in 2025 than earlier thought.

A weaker yen tends to push prices higher in Japan, which depends heavily on imports, and that in turn raises pressure on the Bank of Japan to raise rates. Analysts say they expect a BOJ rate hike in January, but also that the central bank is wary of big changes as it waits to see possible shocks from President-elect Donald Trump's policies on tariffs.

Australia's S&P/ASX 200 shed 1.7% to 8,168.20, while the Kospi in South Korea slipped 2% to 2,435.93. India's Sensex fell 1.1%.On Wednesday, the S&P 500 fell 3%, just shy of its biggest loss for the year, to close at 5,872.16. The Dow Jones Industrial Average lost 1,123 points, or 2.6%, to 42,326.87, and the Nasdaq composite dropped 3.6% to 19,392.69.

Powell said some Fed officials, but not all, are also already trying to incorporate uncertainties inherent in a new administration coming into the White House. Worries are rising on Wall Street that President-elect Donald Trump’s preference for tariffs and other policies could further fuel inflation.

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