FX.co ★ Asian Shares Decline As Investors Await Fed Meeting Outcome

Asian equity markets largely closed in the red on Tuesday as investors eagerly anticipated impending central bank decisions to guide their investments.

The Japanese yen plummeted to 150 against the dollar as the Bank of Japan concluded its eight-year-long era of negative interest rates, marking a significant shift with its inaugural rate increase in 17 years. In Australia, the dollar descended to a fortnightly low as the country's Reserve Bank retained interest rates at a 12-year peak, suggesting that the tightening of monetary policy may have reached its endpoint.

Investor attention now turns to the impending two-day policy meeting of the U.S. Federal Reserve, where the focus will be on any signals regarding rate cuts, in response to persistent inflation issues.

Elsewhere, Chinese markets witnessed substantial falls; regulators leveled accusations against Evergrande Group for inflating revenue by more than $78 billion. Consequently, China's Shanghai Composite index fell 0.72 percent to 3,062.76, while Hong Kong's Hang Seng index declined 1.24 percent to 16,529.48. The People's Bank of China is set to make an announcement on its benchmark loan prime rate on Wednesday, but no alterations are anticipated.

Despite an initial slowdown, Japanese markets rebounded significantly, thanks in part to the Bank of Japan retaining its dovish position. The bank pledged to maintain a consistent buying pattern of government bonds due to prevailing apprehensions about the national economy's recovery. As the yen dropped to its lowest level in two weeks, the Nikkei average increased by 0.66 percent to 40,003.60, indicating that monetary conditions will likely remain lenient. The broader Topix index grew by 1.06 percent, closing at 2,750.97. Various exporters, including Sony, Honda Motor, Panasonic, and Toyota, saw their stocks rise between 1-3 percent.

However, Seoul's equity market plummeted, primarily impacted by the technology sector's dip. Despite Nvidia's launch of its latest AI chips named Blackwell, SK Hynix's stock dropped by 2.5 percent. The Kospi average convened at 2,656.17, marking a 1.10 percent decrease.

Contrarily, Australian markets saw moderate gains after the Reserve Bank maintained its interest rates but issued a warning that the battle against inflation was far from over. Its benchmark, the S&P ASX 200, rose marginally by 0.36 percent, ending at 7,703.20, while the broader All Ordinaries index climbed by 0.41 percent to close at 7,957.80.

In New Zealand, the benchmark S&P NZX-50 index surged by 0.77 percent to 11,817.91.

Meanwhile, U.S. stocks gained strength, even as Treasury yields reached a three-week high due to uncertainties around the Federal Reserve's easing policies. The Nasdaq Composite index, largely composed of tech stocks, ascended by 0.8 percent fueled by renewed investor interest in AI capabilities. The S&P 500 halted its three-day downward trend by adding 0.6 percent, while the Dow nudged up by 0.2 percent.