Nissan shares soar: Asian markets in motion ahead of Fed decision

Asian markets were volatile on Wednesday as investors eagerly awaited the Federal Reserve's highly anticipated interest rate decision. Central to the focus was Japanese automaker Nissan, whose shares surged by more than 20 percent following reports of merger talks with rival Honda. Activity across the region was limited ahead of the U.S. central bank's rate decision. On Wall Street, profit-taking led to a negative tone while economic data were mixed. It is generally expected that the Fed will cut rates for the third consecutive time. However, the main focus is on the accompanying statement, which is expected to provide insights into plans for the coming year. With declining inflation still above the two-percent target and a still strong labor market, policymakers have been able to ease their policy since September, hoping to steer the economy gently. However, the impending inauguration of Donald Trump next month, who has announced tax cuts and deregulations, among other things, is causing uncertainties. Rising prices could force the Fed to reconsider its rate path. "We are experiencing a storm of change and uncertainty that significantly impacts global economies," commented Stephen Innes of SPI Asset Management. "The pressing question is whether the Federal Reserve will take a pause starting January." He concluded with the assessment that the focus is on signaling a potential pause, and how clearly the Fed might announce this possible course change. While Wall Street fell—albeit still near recent record levels—Asian markets were mixed. Hong Kong, Shanghai, Sydney, Seoul, and Taipei advanced, while Singapore, Wellington, and Manila declined. In Tokyo, there were slight losses, but Nissan soared by 24 percent after reports of upcoming merger talks with Honda were released. This merger could help both companies better compete against Tesla and other electric vehicle manufacturers. Although the companies did not confirm the reports, they had already agreed to a strategic partnership in the electric mobility sector in March. Most recently, Nissan has been struggling, announcing last month the elimination of 9,000 jobs and a cut in its annual sales forecast.