Asian markets experienced a downturn on Wednesday as investors monitored developments in the Trump-Harris presidential debate and anticipated the upcoming U.S. consumer price inflation data, which could impact the Federal Reserve's policy decisions next week.
Analysts predict the headline CPI to have increased by 0.2 percent month-over-month in August, consistent with the previous month's figures.
The dollar weakened while gold prices rose, influenced by dovish expectations for the Federal Reserve. Current projections suggest a 25-basis-point rate cut, though this may not suffice to stay ahead of economic trends.
Oil prices advanced by more than 1 percent in Asian trading, following a significant drop to near three-year lows in New York due to concerns about weak demand.
Chinese markets reached a seven-month low after the U.S. House of Representatives passed the BIOSECURE Act, which restricts U.S. relations with specific Chinese biotech firms to protect national security.
The Shanghai Composite index fell by 0.82 percent to 2,721.80. Hong Kong's Hang Seng index declined by 0.73 percent to 17,108.71, hitting a near one-month low earlier in the session.
Japanese markets declined sharply while the yen surged to an eight-month high after Bank of Japan board member Junko Nakagawa indicated a willingness to raise rates further if the economy and inflation align with forecasts.
The Nikkei average dropped by 1.49 percent to 35,619.77, and the broader Topix index closed 1.78 percent lower at 2,530.67. Major automakers, including Honda Motor, Toyota, Nissan, and Mitsubishi Motors, saw losses of 3-4 percent.
Seoul's stocks decreased for the seventh consecutive session due to foreign investor sell-offs. The Kospi average fell by 0.4 percent to 2,513.37, with financial and tech stocks weighing down the index.
Samsung Electronics declined by 2 percent, KB Financial Group plummeted by 6 percent, and Shinhan Financial Group dropped by 6.2 percent.
Australian markets ended slightly lower after Reserve Bank of Australia Assistant Governor Sarah Hunter noted that the labor market remains tight relative to full employment.
The benchmark S&P/ASX 200 slipped by 0.30 percent to 7,987.90, led by losses in banking and energy sectors. The broader All Ordinaries index settled 0.27 percent lower at 8,195.20.
In New Zealand, the benchmark S&P/NZX-50 index finished marginally lower at 12,632.35.
U.S. stocks showed mixed movements before closing ahead of the Harris-Trump debate and the release of August's CPI inflation report.
The Nasdaq Composite, heavily comprised of tech stocks, gained 0.8 percent, while the S&P 500 added 0.5 percent, marking consecutive gains. In contrast, the Dow dipped by 0.2 percent, affected by falling oil prices and cautious statements from American bank executives.
