Chinese ADRs dropped in premarket trading as investors awaited clearer signals from the world’s key central banks and Beijing that would shape the outlook for markets next year.

Bilibili, Alibaba, and Trip.com fell 2%; XPeng, JD.com, and Baidu fell about 1%.

Investors are now gearing up for the coming policy meetings by the US Federal Reserve and the Bank of Japan in the coming weeks, with rate decisions expected to have a pronounced impact on global capital flows.

The Fed is widely expected to lower the benchmark interest rate by 25 basis points next week, while Japan’s central bank will probably raise the borrowing costs for a second time this year, marking a major shift from an ultra-loose monetary policy.

Investors remain wary of a repeat of the turbulence that followed the rate hike by Japan’s central bank in July last year, which unwound the yen carry trade and rattled global assets. The Bank of Japan has raised the borrowing cost three times since it officially ended the zero interest-rate approach in March 2024.

Attention is also turning to China’s annual central economic work conference, scheduled later this month, for clues on how Beijing will deploy policies next year to steer the world’s second-largest economy amid slumping home prices and deflationary pressures.

A private purchasing managers’ index released on Wednesday indicated that China’s service industry expanded at a slower pace in November.