Asian stocks traded in a narrow range at Thursday's open, easing after three days of gains driven by bets on a Federal Reserve interest rate cut next month.

The MSCI Asia Pacific Index fell 0.2% as stocks in Japan retreated 1%. The yen gained 0.4% against the dollar. US Treasury Secretary Scott Bessent said the Bank of Japan is falling behind the curve in addressing inflation and expected the central bank to hike rates. 

Chinese equities will be in focus after the Nasdaq Golden Dragon China Index rose for a second session, helped by earnings from Tencent Holdings Ltd. US stocks closed at a record as Apple Inc. and Amazon.com Inc. climbed. Bitcoin reached an all-time high. Treasuries were steady Thursday after rallying in the prior session. The dollar fell for a third consecutive day. 

Stocks soared to record levels amid low volatility as traders now fully expect a quarter-point move by the Fed after an inflation print earlier this week was seen as benign. External pressure on the Fed is also coming from President Donald Trump's administration with Bessent making his most explicit demand yet for the central bank to execute a cycle of cuts.

On Japan, Bessent said the central bank is going to be hiking rates as the country needs to get "inflation problem under control."

In the latest Bloomberg survey of economists watching the BOJ, around 42% of respondents said they expected a rate hike in October, with a third expecting a move in January. The BOJ is expected to stand pat when it next sets policy on Sept. 19.

Bessent — who suggested the Fed's benchmark rate ought to be at least 1.5 percentage points lower than it is now — said officials might have cut rates if they'd been aware of the revised data on the labor market that came out a couple of days after the latest meeting. 

The Federal Reserve Open Market Committee last month kept their benchmark at a target range of 4.25% to 4.5%.

Source : Bloomberg