Asian stocks sink before policy-packed week; Nikkei hit by pre-BOJ jitters
Investing.com-- Most Asian stocks fell on Monday as investors hunkered down for a data-heavy week headlined by the Federal Reserve, while uncertainty before a Bank of Japan meeting weighed heavily on the Nikkei.
Markets are awaiting interest rate decisions from the Bank of Japan, the Federal Reserve and the Bank of England, as well as key economic readings from China and the U.S. Major third-quarter earnings, particularly from iPhone maker Apple Inc (NASDAQ:AAPL), are also on tap this week.
Risk appetite remained frail as Israel launched a large-scale ground assault on Gaza over the weekend, drawing ire from a string of Arab states. But there appeared to be no broader spillover in the Middle Eastern conflict.
Sentiment was also battered by Wall Street indexes entering correction territory last week, although futures rose in evening trade on Sunday.
The Nikkei 225 sank 1.2% on Monday, and was the worst performer in Asia as traders hunkered down before a Bank of Japan meeting on Tuesday.
Weakness in technology stocks also weighed on the Nikkei.
The BOJ is widely expected to keep interest rates at negative levels. But media reports suggested that a potential shift in the bank’s yield curve control policy was on tap, especially given recent increases in inflation and weakness in the yen. Japanese government bond yields have also risen significantly, testing the BOJ’s target range.
Any hawkish moves by the BOJ herald an end to the nearly decade’s worth of easy monetary policy enjoyed by Japanese stocks, and are likely to sap investor appetite for the market.
A dovish BOJ was one of the biggest drivers of a Japanese stock rally this year, as interest rates rose sharply across the globe.
Broader Asian markets retreated
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