Key Asian stock gauges fluctuated Wednesday after the S&P 500 hit a record on hopes the Federal Reserve will cut interest rates to curb a jobs downturn. Shares in South Korea rose in early trading, while those in Japan and Australia were mixed. US equity futures contracts edged higher after Big Tech lifted the index on Tuesday, even as most shares fell. After fresh signs of a cooling labor market, investors are bracing for inflation reports in the coming days that will help shape next week's Fed meeting and the path of rate cuts into 2025 — a key test for whether Wall Street can sustain this month's rally. Money markets are almost fully projecting three Fed cuts this year, with US producer and consumer price index data due this week. We take a closer look with Zachary Hill, Head of Portfolio Management at Horizon Investments.

Meantime, the yen was little changed early Wednesday after gaining Tuesday, following a report that Bank of Japan officials may raise interest rates again this year, regardless of domestic political instability. The timing of the BOJ report will make JGB traders a bit nervous about today's 5-year auction, which could mean a lower bid-to-cover ratio than last month's 2.96. However, after an initial knee-jerk selloff investors will likely find that secondary yields above 1% already price in a BOJ tightening. For more, we hear from Robert Tipp, Chief Investment Strategist and Head of Global Bonds at PGIM Fixed Income. He speaks with Bloomberg's Shery Ahn and Avril Hong on The Asia Trade.

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