Asian Stocks Rise Ahead of Expected Fed Hike

Asian stocks recovered modestly after four consecutive sessions of losses as investors awaited the Federal Reserve’s expected 25-basis-point interest-rate increase, with the MSCI Asia-Pacific index excluding Japan rising about 0.2% and South Korean shares gaining 0.8%. Markets assigned roughly a 92% probability to a hike, which would be the Fed’s first increase since 2023, while investors focused on Chair Kevin Warsh’s guidance amid persistent inflation and concerns about further tightening. The 10-year U.S. Treasury yield briefly exceeded 5%, its highest level since 2007, before easing near 4.98% to 5%, adding pressure to equities and raising borrowing costs. Oil prices retreated modestly to around $108 a barrel after a sharp monthly rally linked to supply disruptions, while the dollar held near a two-week high and digital assets remained under pressure. Analysts warned that volatility could increase after the Fed announcement, though much of the expected tightening may already be reflected in asset prices.