FX.co ★ Asian Shares Mostly Higher Amid Dovish Fed

Asian equities mostly closed higher on Monday, though Japanese stocks saw a notable decline. The yen strengthened as the U.S. dollar hit a three-week low, influenced by a dovish outlook from the Federal Reserve and hawkish comments from Bank of Japan Governor Kazuo Ueda regarding potential interest rate hikes.

The U.S. dollar faced selling pressure, and bond yields softened following Federal Reserve Chair Jerome Powell's indication of imminent interest rate cuts.

Gold prices firmed, and oil prices jumped approximately 1 percent in Asian markets after high-level Gaza ceasefire talks in Cairo concluded without a final agreement.

Hostilities escalated on the Israel-Lebanon border, with extensive fire exchanges between Israeli and Hezbollah forces early Sunday morning.

China's Shanghai Composite Index fluctuated before closing marginally higher at 2,855.52. Hong Kong's Hang Seng Index extended a three-week winning streak, rising 1.06 percent to 17,798.73.

Japan's Nikkei 225 Index fell 0.66 percent to close at 38,110.22, weighed down by a stronger yen, which negatively impacted exporter stocks. The broader TOPIX Index declined 0.87 percent to 2,661.41. Key decliners included transportation equipment, banking, and rubber products. Department store operator Isetan Mitsukoshi Holdings dropped 6.5 percent, and Takashimaya fell by 1.3 percent.

In Seoul, the Kospi Index decreased for a second consecutive day, falling 0.14 percent to 2,698.01. The decline was led by tech stocks, with Samsung Electronics and SK Hynix losing 2.1 percent and 3.2 percent, respectively. The local currency reached its highest level against the U.S. dollar in over five months following Powell's dovish comments.

Australian markets experienced broad-based gains, reaching a three-week high as investors welcomed the prospect of a September rate cut by the Federal Reserve. The benchmark S&P/ASX 200 rose 0.76 percent to 8,084.50, its highest level since August 1, while the broader All Ordinaries Index also increased by 0.76 percent to close at 8,311.50.

Across the Tasman Sea, New Zealand's S&P/NZX 50 Index added 0.48 percent, finishing at 12,589.83.

U.S. stocks saw a significant rise on Friday, and the 10-year Treasury yield dropped to just below 3.80 percent after Powell indicated a policy adjustment was on the horizon. The Dow Jones Industrial Average climbed 1.1 percent, the S&P 500 gained 1.2 percent to reach its highest closing level since mid-July, and the tech-heavy Nasdaq Composite surged 1.5 percent.

"The direction is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks," Powell noted at the Jackson Hole Economic Symposium.