Logo of the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), is displayed at an exchange in Tokyo, Japan, on Friday, October 2, 2020.
Akio Kon | Bloomberg via Getty Images
SINGAPORE – Asia-Pacific markets traded lower on Monday as investors headed towards this week’s US Federal Reserve monetary policy meeting.
Japanese Nikkei 225 1% down in early hour trading while the Topix index fell 0.98%. In Korea, Kospi fell 0.47%.
In Australia, ASX 200 down 0.38%. The energy, materials and financials sub-indexes fell 0.85%, 1.08% and 0.38% respectively as big banks, mining companies and oil stocks sold off. However, Commonwealth Bank shares rose 0.43%.
Last Friday, stocks sold off globally. The tech-heavy Nasdaq Composite posted a 7.6% loss for the week, its lowest since October 2020 and also 14% below its November close.
The Federal Open Market Commission is due to meet on Tuesday and Wednesday to decide next steps for US monetary policy.
Rising inflation is a major concern for the US central bank and Investors will listen carefully to see how worried the Fed really is – Chairperson Jerome Powell was briefed by media on Wednesday afternoon local time after the FOMC released its statement.
“Markets have traded cautiously ahead of this week’s FOMC statement, which is expected to be hawkish and likely outline the case for a rate hike starting in March,” ANZ analysts Research wrote in a note Monday morning.
They said they doubt the Fed will end quantitative easing this week as some speculated in the market.
ANZ analysts added: “We also doubt that the Fed will start tightening policy with a 50 bps rate hike. Markets could stabilize if the Fed is not as hawkish as some are concerned. worst case scenario”.
Currency and oil
In the money market, U.S. dollar traded at close to par at 95,685 compared to a basket of stocks in the same industry.
The Japanese yen changed hands at 113.76 per dollar, up from above 114.8 in the previous week. The Australian dollar little changed at $0.7180.
Oil prices rose on Monday during Asian trading hours: US crude oil rose 0.8% to $85.82 per barrel.
Both US crude and the global benchmark Brent gained for the fifth straight week last week, up about 2% on the week, Reuters reported. Prices have risen more than 10% this year due to supply concerns.
