Stock markets in Asia opened on a steady note on Monday as optimism over a possible US interest rate cut supported risk appetite at the start of the final month of 2025. Investors also kept a close watch on the Japanese yen, which strengthened amid expectations of a near-term policy shift in Tokyo.The yen advanced to 155.64 per US dollar as Bank of Japan Governor Kazuo Ueda delivered a speech in Nagoya. Ueda said the central bank would weigh the “pros and cons” of raising interest rates at its next policy meeting in December, a comment that investors parsed for signals on the timing of a long-awaited hike.MSCI’s broadest index of Asia-Pacific shares outside Japan was steady at 703.19, up 23.5% so far this year and on track for its strongest annual performance since 2017. Japan’s Nikkei, however, slipped 1.3% in early trading.Hong Kong’s Hang Seng index climbed more than 1%, helping support broader Asian stocks, though US futures traded lower during Asian hours.“The risk bulls roll into December feeling positive about directional bias,” said Chris Weston, head of research at Pepperstone. As earlier concerns faded, he said, investors were now driven by the fear of missing out and underperforming benchmarks.Markets will be guided this week by US economic releases on manufacturing, services and consumer sentiment. Analysts say volatility could rise as traders weigh whether the economy is cooling without slipping into recession.“With the US data void finally being filled and a busy economic calendar ahead, December looks set to be a merry one for volatility hunters,” said Matt Simpson, senior market analyst at StoneX in Brisbane. He added that a controlled slowdown would likely keep sentiment upbeat while weakening the US dollar, which typically softens at year-end.The dollar index was little changed at 99.414, after falling 8% so far this year, most of the losses coming in early 2025.Investors will also track remarks from Federal Reserve Chair Jerome Powell later on Monday, as dovish signals have increased confidence that a rate cut could come this month. Traders are now pricing an 87% probability of a cut.Holiday shopping trends remain another key indicator. US online spending on Black Friday hit a record $11.8 billion, up 9.1% from last year, according to Adobe Analytics.In commodities, oil prices rose after OPEC+ decided to keep output unchanged for the first quarter of 2026 amid worries about a potential supply glut. Brent crude futures gained 1% to $63.03 a barrel, while U.S. West Texas Intermediate crude added 0.99% to $59.16.Meanwhile, Japan’s finance minister issued yet another warning against sharp foreign-exchange swings, saying recent yen moves were “clearly not driven by fundamentals.” Authorities have struggled to slow the currency’s slide as traders weigh doubts over the timing of the next rate hike and fiscal risks under Prime Minister Sanae Takaichi.
