The Japanese stock market has experienced a downward trend for four consecutive sessions, losing nearly 780 points or 2 percent during this period. Currently, the Nikkei 225 is positioned just above the 39,080 mark, and indications suggest a likelihood of continued significant declines on Thursday.
Globally, Asian markets are poised for substantial adjustments due to the worsening outlook on interest rates. While European markets remained largely stagnant, U.S. stock exchanges saw a pronounced downturn, a pattern that Asian markets are expected to emulate.
On Wednesday, the Nikkei 225 saw moderate losses, primarily due to declining financial and technology stocks, though these were somewhat offset by robust performances from automotive manufacturers. The index dropped by 282.97 points, or 0.72 percent, closing at a daily low of 39,081.71 after reaching a high of 39,382.69.
Among active stocks, Nissan Motor surged by an impressive 23.70 percent, Mazda Motor increased by 5.54 percent, while Toyota Motor rose by 2.02 percent. Conversely, Honda Motor fell by 3.04 percent, Softbank Group by 4.10 percent, Mitsubishi UFJ Financial decreased by 0.47 percent, and Sumitomo Mitsui Financial declined by 0.68 percent. Mitsubishi Electric slightly gained 0.34 percent, Sony Group dropped by 2.63 percent, Panasonic Holdings by 0.78 percent, Hitachi fell by 0.58 percent, with Mizuho Financial remaining stable.
Wall Street provided a harsh lead, as major indices remained largely flat early Wednesday but plunged following the Federal Open Market Committee's interest rate announcement.
The Dow plummeted by 1,123.03 points or 2.58 percent to settle at 42,326.87. Meanwhile, the NASDAQ dropped by 716.37 points or 3.56 percent to end at 19,392.69, and the S&P 500 declined by 178.45 points or 2.95 percent to conclude at 5,872.16.
The significant sell-off occurred after the Federal Reserve confirmed its anticipated decision to cut interest rates by a quarter-point. However, it projected fewer rate cuts next year than previously estimated.
Despite the expected rate reduction, the focus shifted to the Fed's updated economic outlook. The latest projections anticipate rates to be between 3.75 and 4.0 percent by the end of 2025, compared to the earlier forecast of 3.25 to 3.50 percent in September.
Assuming a quarter-point rate cut, projections now indicate only two rate reductions next year, compared to four previously forecasted, as officials expect inflation to rise more than initially anticipated by 2025.
In the commodities market, crude oil prices rose on Wednesday, recovering from recent declines as data revealed a decrease in crude inventories and an increase in gasoline stockpiles last week. January futures for West Texas Intermediate Crude increased by $0.50, or 0.71 percent, closing at $70.58 per barrel.
Domestically, the Bank of Japan is set to conclude its monetary policy meeting today, with an announcement on interest rates soon to follow. The BoJ is widely expected to maintain its benchmark lending rate at 0.25 percent.
The material has been provided by InstaForex Company -
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