Investing.com– Asian stocks were largely muted on Thursday as trading remained thin with major stock indexes shut for holidays, while Japanese shares climbed after a report showed Japan planning a record budget for the upcoming fiscal year.
Stock markets in Indonesia and Hong Kong were closed for Christmas, while Australia and New Zealand markets were shut on Thursday for the Boxing Day holiday.
U.S. stock index futures were largely steady in Asian trade on Thursday.Â
Asian markets were nursing losses in recent sessions after the Federal Reserve flagged a slower pace of interest rate cuts in 2025- a scenario that bodes poorly for risk-driven assets.Â
Japan shares jump on plans for record budget; firmer rate hike bets
Japan’s  index rose nearly 1% on Thursday, while the gained 0.6%.Â
Japan’s government is preparing a record $735 billion budget for the fiscal year starting in April, driven by rising social security and debt-servicing expenses, according to a draft obtained by Reuters.
The 115.5 trillion yen draft budget comes as the Bank of Japan moves away from its decade-long stimulus program, increasing pressure on the government to take on a larger role in supporting the economy.
BOJ Governor Kazuo Ueda said on Wednesday that the economy is expected to make progress toward sustainably reaching the central bank’s 2% inflation target next year, hinting that an interest rate hike could be approaching.
However, he emphasized the importance of carefully evaluating the impact of uncertainties in global economies, particularly the policies of the incoming U.S. administration under President-elect Donald Trump.Â
Chinese stocks muted despite fresh stimulus
China’s  and  indexes were largely unchanged.
Chinese authorities have decided to issue a record-breaking 3 trillion yuan ($411 billion) in special treasury bonds next year, in an intensified fiscal effort to stimulate a struggling economy, Reuters reported on Tuesday.
Moreover, China is allowing local officials to broaden investments with key government bonds and simplifying approvals, permitting projects unless restricted by a cabinet-published list, to better utilize public funding for economic growth, a government document showed on Wednesday.
Markets were holding out for more clarity on Beijing’s plans for stimulus measures in the coming year. Recent reports suggested that the country will ramp up fiscal spending to support economic growth.
In other regions, stock markets saw marginal moves amid thin trading.
South Korea’s  was largely unchanged, while Thailand’s was also muted.
Singapore’s  fell 0.2%, while  for India’s  index pointed to a weak open, as the index nursed steep losses over the past few weeks.
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