Asia stocks muted amid thin trading, Japan shares jump on record budget plans By Investing.com

Investing.com — Asian stocks were largely weak on Thursday as trading remained thin with major stock indexes closed for the holidays, while Japanese shares rose after a report showed Japan is planning a record budget for the upcoming fiscal year.

Stock markets in Indonesia and Hong Kong were closed on the occasion of Christmas, while the markets of Australia and New Zealand were closed on Thursday on the occasion of the Christmas holiday.

US stock index futures were largely flat in Asian trading on Thursday.

Asian markets suffered losses in recent sessions after the Federal Reserve announced a slowdown in the pace of interest rate cuts in 2025 – a scenario that bodes poorly for risk-driven assets.

Japanese stocks jump on record budget plans; Firmer bets on interest rate hikes

The Japanese index rose by about 1% on Thursday, while the index rose by 0.6%.

The Japanese government is preparing a record $735 billion budget for the fiscal year that begins in April, driven by rising social security and debt service expenses, according to a draft obtained by Reuters.

The 115.5 trillion yen budget draft comes as the Bank of Japan moves away from its decade-long stimulus program, increasing pressure on the government to play a greater role in supporting the economy.

Bank of Japan Governor Kazuo Ueda said Wednesday that the economy is expected to make progress toward sustainably reaching the central bank’s 2% inflation target next year, hinting that an interest rate hike could be soon.

However, he stressed the importance of carefully assessing the impact of uncertainties on global economies, especially the policies of the incoming US administration under President-elect Donald Trump.

Chinese stocks fell despite the new stimulus

China and indices are largely unchanged.

Chinese authorities have decided to issue a record 3 trillion yuan ($411 billion) worth of special treasury bonds next year, as part of an intense fiscal effort to stimulate the faltering economy, Reuters reported on Tuesday.

Moreover, China is allowing local officials to expand investments using key government bonds and simplifying approvals, allowing projects, unless restricted by a list published by the Cabinet, to better tap public financing for economic growth, a government document showed on Wednesday.

Markets were looking for more clarity on Beijing’s plans for stimulus measures next year. Recent reports indicated that the country will increase fiscal spending to support economic growth.

In other regions, stock markets witnessed marginal movements amid weak trading.

South Korea was largely unchanged, while Thailand was also silent.

The Singapore index fell by 0.2%, while the India index indicated a weak opening, as the index suffered sharp losses over the past few weeks.