Asian stocks trade mixed, Japan’s Nikkei leads gains ahead of Fed rate decision

Asian stock markets trade in a flat-to-low range on Wednesday as investors turn to a cautious mood ahead of the Federal Open Market Committee (FOMC) policy meeting on Wednesday. Japan’s Nikkei leads gains after Japanese authorities came out with verbal intervention on one-sided and sharp FX moves.

At press time, China’s Shanghai is up 0.24% to 3,026, the Shenzhen Component Index is down 0.15% to 9,850, Hong Kong’s Hang Sang is up 0.07% to 17,125, South Korea’s Kospi gains 0.79%, India’s NIFTY 50 drops 0.14%, and Japan’s Nikkei rises 2.19%.

On Wednesday, China's Caixin Manufacturing PMI fell to 49.5 in October from September’s expansion of 50.6, below the market consensus of a 50.8 rise. The weaker-than-expected Chinese data adds doubt to recent optimism for a recovery in the world's second-largest economy.

In Japan, the final Jibun Bank PMI shrank in the contraction zone for a fifth straight month in October by arriving at 48.7. Furthermore, the significant drop in the Japanese Yen (JPY) after the Bank of Japan's rate decision on Tuesday sparked a warning from Japanese authorities. Early Wednesday, Japan's top currency diplomat Masato Kanda said that he is concerned about one-sided and sharp FX moves. Kanda further stated that he won't rule out any steps to respond to disorderly FX moves.

Market participants will closely monitor the FOMC rate decision later on Wednesday. The hawkish message from FOMC Chair Jerome Powell might lift the US Dollar (USD) and trigger volatility in the riskier assets like stock markets.