Asia-Pacific markets mixed after Powell signals smaller rate cuts; China markets closed for holiday

Asia-Pacific markets closed mixed on Tuesday, after Federal Reserve Chair Jerome Powell indicated the recent outsized cuts enacted by the U.S. central bank should not be interpreted as a sign that future moves will be as aggressive.

"This is not a committee that feels like it's in a hurry to cut rates quickly," he said during a Q&A period following his speech with Morgan Stanley economist Ellen Zentner. "If the economy performs as expected, that would mean two more rate cuts this year, a total of 50 [basis points] more."

The current federal funds rate stands at 4.75%-5%, with the expected additional 50 basis points in cuts set to take the Fed's benchmark interest rate to 4.25%-4.5% at the end of 2024.

In Asia, traders will focus on the Bank of Japan's third quarter Tankan survey, which measures the level of business optimism among large Japanese companies.

Business optimism among large Japanese manufacturers came in at +13, unchanged from the quarter before and in line with forecasts from a Reuters poll.

Separately, sentiment among large non-manufacturers in Japan improved, inching up to +34 from +33 in the second quarter and beating Reuters expectations of +32. A positive figure indicates that optimists outnumber pessimists, and vice versa.

The BOJ also released its summary of opinions for its Sept. 19-20 meeting, which came a day after the U.S. Federal Reserve delivered a 50 basis points cut and before the ruling Liberal Democratic Party election last week.

During that meeting, the BOJ did not make any changes to its benchmark interest rate, with the summary of opinions revealing that at least one board member thought that a rate hike is "undesirable" as this would suggest that the bank was moving to a full fledged tightening