Asian stocks decline slightly; Nikkei index reverses losses following BOJ interest rate increase

Asian stocks decline slightly; Nikkei index reverses losses following BOJ interest rate increase

© Reuters.

Investing.com– Most Asian stocks fell Tuesday amid lingering anxiety over the upcoming Federal Reserve meeting, while Japan’s Nikkei 225 pared early losses after the Bank of Japan raised rates of interest, but maintained an accommodating stance.

Regional markets were none too happy with a positive close on Wall Street, with U.S. stock index futures falling in Asian trading as a slight rally in the technology sector dried up.

Anticipation of potentially hawkish signals from the Fed remained a major concern for markets. The bank is expected to do so on Wednesday, but it could potentially become hawkish in the face of persistent inflation.

Japan’s Nikkei 225 cuts losses after historic BoJ decision

Japan’s index rose 0.3%, while the broader index jumped 0.6% after paring the bulk of its earlier losses.

The BoJ rose 0.1%, its first such move in 17 years, while also signaling an end to its yield curve control policies, particularly its purchases of assets in free markets.

But the central bank still indicated that Japanese monetary conditions would remain largely accommodative amid persistent concerns about the weakness of the Japanese economy.

Tuesday’s move, while historic, also reflects a marginal tightening of monetary policy, leaving in place much of the liquidity that Japanese markets have enjoyed for nearly a decade.

Other regional central bank meetings have also produced positive results. Australia’s rose 0.3% after interest rates remained stable, but struck a less hawkish chord than markets expected. The RBA no longer warned that it would increase interest rates further.

China and indexes fell 0.3% each as investors digested mixed economic data from the previous session, while losses in technology stocks dragged the Hong Kong index down 1.2 %.

A decision from the People’s Bank of China on its benchmark is also expected this week, with the PBOC expected to leave its rate unchanged on Wednesday.

India’s index fell 0.5% as it struggled to recover from a sharp fall from record highs, with heavyweight technology stocks following weakness in their global peers.

Tech and AI stocks fall despite reveal of Nvidia’s new chip

Top Asian technology stocks, particularly those exposed to artificial intelligence, fell on Tuesday, following a decline in the aftermarket of AI darling NVIDIA Corporation (NASDAQ:) after the company unveiled its latest lineup of AI chips. Nvidia lost almost 2% in aftermarket trading.

SK Hynix Inc. (KS:) and Samsung Electronics Co Ltd (KS:) slipped nearly 4% and 1.4%, respectively, dragging South Korea down more than 1%.

In Japan, Avantest Corp. (TYO:), which is a supplier to Nvidia, fell 2.7%, while Tokyo Electronics Ltd. (TYO:)n, the country’s most valuable chipmaker, lost 0.2%.

Nvidia revealed its latest line of AI chips, called Blackwell, at a developers conference on Monday. But the AI ​​darling gave no indication of the price of the chips.

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