Asia-Pacific markets traded mixed on Wednesday, following declines on Wall Street after a sell-off in technology stocks picked up pace.
Japanese markets were in focus for investors. The Bank of Japan held interest rates steady at 0.5%, in line with expectations, as the central bank weighed the potential impact of U.S. President Donald Trump’s tariffs.
Japan’s benchmark Nikkei 225 lost 0.25% in choppy trade to end the day at 37,751.88, while the broader Topix index increased 0.45% to 2,795.96.
Over in South Korea, the Kospi index advanced 0.62% to close at 2,628.62 while the small-cap Kosdaq fell 0.96% to 738.35.
Mainland China’s CSI 300 closed flat at 4,010.17 while Hong Kong’s Hang Seng Index was flat in its last hour.
India’s benchmark Nifty 50 rose 0.39% while the broader BSE Sensex picked up 0.28% as at 1.15 p.m. local time.
Australia’s S&P/ASX 200 ended the day 0.41% lower at 7,828.30.
Gold prices hit a record high, with the precious metal trading at $3,039.12 at 3.45 p.m. Singapore time.
U.S. futures edged up, as investors await the Federal Reserve’s interest rate decision.
All three benchmarks were back in the red after two straight winning sessions.
The Dow Jones Industrial Average lost 260.32 points, or 0.62%, closing at 41,581.31. The S&P 500 shed 1.07%, ending at 5,614.66. The broad market index concluded the day 8.6% off its closing high reached in February, bringing it near correction territory. The Nasdaq Composite dropped 1.71% and settled at 17,504.12.
Tesla, one of the stocks hardest hit during the market’s recent correction, was down yet again on Tuesday. The stock fell more than 5% after RBC Capital Markets lowered its price target on the electric vehicle name, given stiff competition in the EV space.
Elsewhere, shares of Palantir and Nvidia dropped nearly 4% and more than 3%, respectively. The Technology Select Sector SPDR Fund (XLK) was also down more than 1%.
BOJ will ‘continue to raise’ its policy rate if economy and prices move in line with forecasts: Governor Ueda
The Bank of Japan will “continue to raise” its policy rate, if the Japanese economy moves according to its forecasts, Governor Kazuo Ueda said at a press conference Wednesday, according to a Reuters translation of his speech.
“If the economy and prices move in line with our forecast, we will continue to raise our policy rate and adjust the degree of monetary support as current real interest rates are very low,” he said.
“If upside risks to underlying inflation heighten, that will be a reason to accelerate our process of adjusting the degree of monetary support,” Ueda added.
The governor added that the BoJ “will look not just at wages, but the economy, prices and risks in deciding policy.”
Ueda’s comments come as wage hikes this year have taken effect across big and small firms.
“It shows wage gains are broadening,” he said.
The BoJ held interest rates steady in its policy meeting earlier in the day.
Bank of Japan’s policy normalization strategy may extend “well beyond 2025,” MFS Investment Management says
The Bank of Japan appears to be in a “tightening mode,” MFS Investment Management said, adding that “a policy normalization strategy that may extend well beyond 2025.”
The central bank held interest rates steady in its Wednesday meeting amid rising yields on its government bonds (JGB).
For instance, the yield on the 10-year JGB edged up 0.015 percentage points to 1.519%, while that for the 20-year JGB ticked up marginally to 2.605% after the policy announcement.
“Local yields have been rising substantially in Japan. We believe this is mainly driven by monetary policy expectations,” Benoit Anne, senior managing director at MFS Investment Management, wrote in a Wednesday note.
Higher yields, he noted, have the “potential to influence local investor behavior and allocations, including less of a pressing need to chase higher yields abroad.”
Still, Anne cautioned that the global macroeconomic outlook and weakness in the U.S. dollar may also impact yields in the longer-term.
