Asia markets tumble after Fed's cautionary outlook prompts Wall Street sell-off; BOJ keeps rate on hold

This is CNBC's live blog covering Asia-Pacific markets.

Asia-Pacific stocks and currencies fell Thursday, amid a broader market sell-off after the U.S. Federal Reserve delivered its third consecutive rate reduction and signaled fewer rate cuts ahead.

Investors assessed the Bank of Japan's decision to keep its policy rate unchanged at 0.25% for the third straight meeting.

The Japanese yen dipped 0.74% to 155.94 against the greenback, hitting a one-month low, as BOJ Governor Kazuo Ueda said the central bank will continue raising policy rates if the economy moves in line with its forecast.

In response to the central bank's move, the Nikkei 225 lost 0.69% to end at 38,813.58, while Topix was down 0.22%, finishing at 2,713.83.

In South Korea, the Kospi index dropped 1.95% to close at 2,435.93 and the Kosdaq index declined 1.89% to 684.36. The South Korean won hovered near its weakest level since March 2009, and was last trading at 1,452.33 on the U.S. dollar.

Australia's S&P/ASX 200 dropped 1.7% to close at 8,168.2.

Hong Kong's Hang Seng index declined 0.88% while the mainland China's CSI 300 index shed 0.62%.

The Hong Kong Monetary Authority on Thursday delivered a 25-basis-point interest rate cut in lock-steps with the Fed. The country's currency is tightly pegged to the U.S. dollar.

Elsewhere, New Zealand's economy sank into a recession, falling 1% in the September quarter from the prior quarter, according to the official statistics agency Stats NZ. A recession is defined as two consecutive quarters of decline.

Overnight in the U.S., the Dow Jones Industrial Average tanked by 1,123.03 points, or 2.58%, to 42,326.87, posting its first 10-day losing streak since 1974. The broad-based S&P 500 dropped 2.95% to 5,872.16 and the Nasdaq Composite lost 3.56% to 19,392.69.

The sell-off on Wall Street came after the central bank lowered its overnight borrowing rate by 25 basis points to a target range of 4.25% to 4.5%. While the cut was widely anticipated, the Fed indicated there will only be two rate cuts in 2025, fewer than the four cuts in its previous forecast.

"We moved pretty quickly to get to here, and I think going forward obviously we're moving slower," Fed Chair Jerome Powell said at the post-meeting press conference.

— CNBC's Brian Evans, Lisa Kailai Han contributed to this report.

Chinese yuan weakens past 7.3 as Fed cuts interest rates and ahead of PBOC decision

Chinese offshore yuan weakened to 7.3218 on the U.S. dollar on Thursday morning after the U.S. Federal Reserve lowered its key interest rate by 25 basis points in a widely anticipated move.

The People's Bank of China is set to release its monthly fixing of benchmark lending rates on Friday.

The one-year loan prime rate, which affects corporate and most household loans, was kept at 3.1% last month and the 5-year LPR, a benchmark for mortgage rates, was maintained at 3.6%, following a cut of 25 basis points in October.

Chinese authorities vowed to adopt a "moderately loose" monetary policy stance earlier this month, prompting the market to pencil in more rate cuts ahead.

— Anniek Bao

Hong Kong cuts base interest rate by 25 basis points, tracking Fed's move

The Hong Kong Monetary Authority on Thursday cut its base interest rate by 25 basis points to 4.75%, in lock-steps with the U.S. Federal Reserve.

The move followed the Fed's quarter-percentage-point interest rate cut overnight. The city monetary policy typically moves in lock-step with the U.S. as the city's currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.

— Anniek Bao

Fed cuts rates as expected, but signals less reductions next year

The Federal Reserve trimmed its overnight borrowing rate by 25 basis points on Wednesday, in a widely anticipated move.

This brings the Fed's borrowing rate to a target range of 4.25% to 4.5%. However, the central bank indicated it would likely only cut rates twice in 2025, according to its closely watched "dot plot," down from four cuts given in its last forecast.

— Brian Evans

Market-moving Powell quotes so far

Federal Reserve Chairman Jerome Powell addressed the press after the central bank disappointed the market by forecasting just two rate cuts next year.

Here are some of the key quotes by Powell during his press conference so far:

• "With today's action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive. We can therefore be more cautious as we consider further adjustments to our policy rate."
• "I think the actual cuts that we make next year will not be because of anything we wrote down today. We're going to react to data; that's just the general sense of what the committee thinks is likely to be appropriate."
• "I would say today was a closer call, but we decided it was the right call because we thought it was the best decision to foster achievement of both of our goals."
• "As we think about further cuts, we're going to be looking for progress on inflation... We have been moving sideways on 12-month inflation."

Follow our Fed live blog for more.

—John Melloy

Dollar index poised for highest closing since 2022

The Dollar Index is on track to end Wednesday at its highest closing level in more than two years.

The index last traded around the 108 level. With that action, the index could conclude at its highest closing point since Nov. 10, 2022, when it finished at 108.21.

— Alex Harring, Nick Wells

All 11 S&P 500 sectors on track to close lower

The selloff was broad-based, with all 11 S&P 500 sectors trading in negative territory following the Federal Reserve's decision to cut interest rates by a quarter point.

The pullback was led by consumer discretionary and real estate, with those sectors falling around 4% and about 2.9%, respectively. Information technology and communication services were each down around 2.4%, while financials, materials and industrials were lower by around 2%.

Moreover, about nine out of every 10 S&P 500 members were on track to end the session in the red.

— Sean Conlon, Alex Harring

Stocks close lower

Stocks closed lower on Wednesday, with the Dow Jones Industrial Average notching its first ten-day losing streak since 1974, after Federal Reserve Chair Jerome Powell signaled less rates in 2025 than previously forecast.

The 30-stock Dow plummeted 1,123.03 points, or 2.58%, to close at 42,326.87. The S&P 500 pulled back 2.95% to 5,872.16, while the Nasdaq Composite finished the session 3.56% lower at 19,392.69.

— Brian Evans

CNBC Pro: Wall Street has mixed feelings toward European stocks for 2025. Here are their big calls

Major investment banks are presenting varied outlooks for European equities in 2025, with predictions ranging from modest gains to significant upside potential, amid concerns about global growth and trade tensions.

CNBC Pro has compiled views from Goldman Sachs, Barclays, Deutsche Bank, JPMorgan, Bank of America and UBS on the outlook for Stoxx 600 and other indexes for 2025.

CNBC Pro subscribers can read more here.

— Ganesh Rao