Asia-Pacific markets muted after Wall Street falls, yen weakens as BOJ holds rates steady

Asia-Pacific markets mixed on Wednesday tracked losses on Wall Street amid economic concerns due to President Donald Trump’s trade policies, while investors awaited the Federal Reserve's policy meeting, with the central bank widely expected to keep interest rates unchanged. Japan ( NKY:IND ) fell 0.17% to 38,000, while the broader Topix Index rose 0.8% to 2,805 on Wednesday, extending recent gains. The Japanese yen slipped to around 149.5 per dollar on Wednesday, marking its fourth consecutive day of decline, after the Bank of Japan kept interest rates unchanged at 0.5%, as widely expected . Separately, Japan's industrial production declined by 1.1% month-over-month in January 2025, matching preliminary data and accelerating from an upwardly revised 0.3% drop in the previous month. Meanwhile, the monthly Reuters Tankan survey revealed that sentiment among Japanese manufacturers turned negative in March due to concerns over US tariff policies and economic weakness in China. Separate data revealed that Japan’s trade balance swung to a surplus in February, supported by strong exports . China ( SHCOMP ) fell 0.19% to below 3,420, while the Shenzhen Component lost 0.4% to 10,970 on Wednesday, with mainland stocks retreating from multi-month highs as investors took profits following a strong rally in Chinese technology and artificial intelligence-related stocks. Hong Kong ( HSI ) rose 0.05% to 24,768 in early trading on Wednesday, trying to extend gains for the fourth session, driven mainly by financial stocks. India ( SENSEX ) rose 0.15% to 75,447 in early deals on Wednesday, rising for the third straight session, mainly supported by gains in realty, metals, PSU Bank, and consumer durables. Australia ( AS51 ) fell 0.41% to close at 7,828 on Wednesday, snapping a three-day winning streak. The Australian dollar stabilized around $0.636 on Wednesday after a volatile start to the week, as investors continued to assess the Reserve Bank of Australia's monetary policy outlook. Meanwhile, Reserve Bank of Australia Assistant Governor Sarah Hunter stated on Tuesday that the central bank’s February rate cut aimed to “take some restrictiveness away.” The Westpac-Melbourne Institute Leading Economic Index in Australia added 0.1% month-over-month in February 2025. Traders now turn their attention to upcoming Australian employment data, which could provide further insights into the labor market’s strength. In the U.S., on Tuesday, all three major indexes ended in red as Wall Street’s sell-off resumed after two days of gains, dragging major indices lower. U.S. stock futures stabilized on Wednesday as investors awaited the Federal Reserve’s latest policy decision: Dow +0.03%; S&P 500 +0.09%; Nasdaq +0.18%. Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Japan’s trade balance swung to surplus in February, driven by strong exports Bank of Japan keeps interest rates unchanged at 0.5%, as widely expected China’s retail sales accelerate 4.0% Y/Y; industrial output grow 5.9% y/y exceeds forecasts; unveils special action plan Japan producer prices rise 4% Y/Y in February 2025, as expected Japan Q4 GDP growth revised slightly lower; annualized basis economy expands by 2.2%