The Japanese stock market has recorded declines over the past three sessions, collectively shedding nearly 500 points or 1.3%. The Nikkei 225 currently sits marginally above the 39,360-point mark, with potential for further declines anticipated on Wednesday.
The forecast for Asian markets remains subdued as the FOMC gears up for its interest rate decision later today. European and U.S. markets mostly experienced losses, suggesting that Asian exchanges are likely to open in a similar vein. Nevertheless, some recovery may occur due to possible bargain hunting later in the day.
On Tuesday, the Nikkei 225 experienced a moderate decline, largely due to losses in the automobile manufacturing sector and mixed results in both financial and technology stocks. The index dropped by 92.81 points or 0.24%, closing at its session low of 39,364.68, following an intraday high of 39,796.22.
Notably, Nissan Motor plummeted by 3.93%, Mazda Motor decreased by 1.27%, Toyota Motor fell 0.72%, and Honda Motor dipped 0.31%. In contrast, Softbank Group surged 4.42%, though Mitsubishi UFJ Financial fell 1.94%, Mizuho Financial slipped 0.81%, and Mitsubishi Electric dropped 2.02%. Meanwhile, Sony Group climbed 1.68%, Panasonic Holdings declined 0.65%, and Hitachi increased by 0.28%.
Wall Street presented a weaker outlook, with the major indices opening lower on Tuesday and remaining down.
The Dow Jones Industrial Average dropped 267.58 points or 0.61% to close at 43,449.90. The NASDAQ fell by 64.83 points or 0.32% to 20,109.06, and the S&P 500 decreased by 23.47 points or 0.39% to 6,050.61.
The decline on Wall Street was primarily driven by a retreat in technology stocks, particularly in the networking and semiconductor sectors. Additional downturns were observed in telecom, financial, housing, and steel stocks.
Market participants continue to be focused on the Federal Reserve's much-anticipated monetary policy announcement. The market generally expects the Fed to reduce rates by another quarter-point, but traders are keenly watching for the Fed's statement and latest economic projections, including their rate forecasts.
Crude oil prices dropped on Tuesday amid concerns about global demand and the potential for increased supply next year. West Texas Intermediate crude oil futures for January settled at $70.08 per barrel, down $0.63 or 0.9%.
On the domestic front, Japan is slated to release its November trade figures, including data on imports, exports, and trade balance later this morning. Expectations are for a 1.0% year-on-year increase in imports, building on October’s 0.4% rise. Exports are anticipated to climb by 2.8% annually, slightly lower than the 3.1% growth seen previously. The trade deficit is projected at 688.9 billion yen, an increase from the prior month's shortfall of 462.1 billion yen.
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