Asian stocks have cautious start, bitcoin in focus

Asian shares started the week on a cautious note as investors braced for a barrage of US economic data amid lingering uncertainty over the Federal Reserve’s policy path.

Japan edged lower along with Australia, while South Korean equities rose. US equity-index futures edged up. The yen held steady after Japan’s economy contracted for the first time in six quarters.

After weeks of limited data, investors will finally get fresh signals on the health of the US economy as agencies begin releasing key indicators, including the employment figures. Traders are also navigating a mix of risks — from stretched valuations in AI-related stocks to renewed strains in relations between China and Japan, while risk appetite seemed to be fading with Bitcoin hovering around $94,000 and wiping out almost all of its year-to-date advance.

“November so far has seen a pretty wobbly ride for shares,” Shane Oliver, chief economist and head of investment strategy at AMP Ltd., wrote in a note to clients. “Share markets remain at risk of a correction given stretched valuations, risks around US tariffs and the softening US jobs market.”

A slew of Fed officials have expressed skepticism over the need for a cut in December, or outright opposed one, less than a month after Chair Jerome Powell warned that a December cut is far from a “foregone conclusion.”

Last week, futures traders pushed the odds of a quarter-point rate cut in December below 50% as some Fed officials indicated that such a move is far from a sure thing. That near-term uncertainty has driven up a gauge of expected bond-market volatility, which had been hovering around a four-year low.

“While there will be questions about data quality, market participants will react to new information” and weigh the dollar, Commonwealth Bank of Australia strategists led by Joseph Capurso wrote in a note to clients. “We expect the non-farm payrolls report for September to underperform expectations of a 50,000 increase.”

In commodities, oil started the week lower while gold edged up. The precious metal has jumped more than 50% this year, putting it on course for its best annual gain since 1979.

Bullion was trading around $4,100 an ounce on Monday, having lost more than 2% in the previous session. Expectations for another rate cut were scaled back last week as Fed officials showed little conviction for reducing borrowing costs. Lower interest rates typically make non-yielding bullion more appealing to investors.

Attention is also on the cryptocurrencies market. Just a little more than a month after reaching an all-time high, Bitcoin erased the more than 30% gain registered since the start of the year as the exuberance over the pro-crypto stance of the Trump administration fades.

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