Asia's monetary policy landscape is becoming more complex as the Federal Reserve signals a reduction in rate cuts for 2025 and raises inflation forecasts.
Nomura has identified a divergence in monetary policy outlooks across the region, with some countries expected to ease their monetary policies in 2025, while others are anticipated to increase interest rates. This reflects the broader economic uncertainties that experts foresee for 2025.
China's economic trajectory will be a focal point for Asian investors, as the country seeks to stabilize its property market and enhance its fiscal system. Despite challenges such as geopolitical tensions and a potential slowdown in exports, analysts expect further stimulus measures from Beijing to support economic recovery.
Taiwan's stock market performed well in 2024, driven by easing monetary policies and a booming AI sector. However, the broader Asian market faces headwinds, particularly in South Korea.
The impending presidency of Donald Trump is expected to significantly influence the economic landscape in Asia, with expectations of increased tariffs that could dampen economic activity. Asian economies will need to adapt to the challenges posed by a stronger dollar and rising interest rates.