- The Uncertainty over BoJ Kuroda’s successor and disappointed earnings have weighed on Nikkei225.
- RBI Governor has announced a hike in the repo rate by 25 bps to 6.50%.
- Oil prices are looking to add more gains ahead of US oil inventory data.
Markets in the Asian domain are witnessing a sell-off as hawkish interest rate guidance by Federal Reserve (Fed) chair Jerome Powell has escalated fears of a further slowdown in the United States economy. Fed’s Powell has confirmed that investors should brace for more interest rates if the labor market continues to surprise the market with significant additions.
Contrary to the performance of the Asian stocks, S&P500 futures have recovered their morning losses and are now looking to add gains above Tuesday’s bullish session. The US Dollar Index (DXY) has demonstrated a sideways auction despite the commentary from US President Joe Biden at the State of the Union (SOTU) on relations with China and more taxes on billionaires by quadrupling taxes on corporate buybacks.
At the press time, Japan’s Nikkei225 dropped 0.40%, ChinaA50 remained flat, Hang Seng gained 0.30%, and Nifty50 jumped 0.60%.
Disappointing results from Japanese equities weighed on Nikkei225 on Wednesday. Poor earnings have joined uncertainty over Bank of Japan (BoJ) Governor Haruhiko Kuroda’s successor have jolted market sentiment in Japan. Japanese Prime Minister (PM) Fumio Kishida said on Wednesday, “in process of choosing the next Bank of Japan (BoJ) Governor nominee, they are mindful of very strong market attention on the decision.”
Nifty50 has turned volatile after the interest rate decision by the Reserve Bank of Index (RBI). RBI Governor Shaktikanta Das has announced a hike in the repo rate by 25 basis points (bps) to 6.5% as the inflationary pressures are still challenging due to global factors. The real Gross Domestic Product (GDP) growth for FY23-24 is projected at 6.4%. The RBI sees inflation moderating in FY23-24 but above the 4% target.
On the oil front, the oil price is aiming to extend its gains to near $78.00 despite the street estimating a build-up in oil inventories by the United States Energy Information Administration (EIA) ahead. A poll from Reuters indicates a build-up of oil inventories by 2.5 million barrels for the week ending February 03.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fluctuates near 1.0700 after US data
EUR/USD stays in a consolidation phase at around 1.0700 in the American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.