Tokyo, Japan (BBN) – Asian equities were in the red on Wednesday morning, following losses in US stocks as traders awaited a rates decision from the US Federal Reserve.
In Japan, the Nikkei 225 was down 0.3 per cent, as the yen strengthened against the dollar, reports CNBC.
A stronger yen is generally seen as a negative for Japanese stocks.
Toshiba fell 6.6 percent in early trade, after the Tokyo Stock Exchange put its shares under supervision to see whether it meets the delisting criteria following the conglomerate postponing its official third-quarter earnings.
“Instead of explaining how they would avoid delisting, Toshiba held a presentation focused on longer-term ‘Measures to Rebuild Toshiba’ and 2019 profit targets,” said equity analysts at Jefferies in a Tuesday note.
Australia’s ASX 200 fell 0.29 per cent, as its gold sub-index went down 1.46 per cent.
South Korea’s Kospi recovered from earlier losses to trade flat. Prior to market open, official data showed that unemployment rate was at 5 per cent in February, its highest since January 2010.
The jobless rate was at 3.8 per cent in January.
All eyes were on the Fed’s monetary policy decision, due Thursday morning Asian time.
“A US rate rise is now baked in the market cake… the focus will shift to board projections,” said Michael McCarthy, chief market strategist at CMC Markets, in a Wednesday note.
Market expectations for a 25-basis-point rate hike stood at 93 per cent on the CMC Group FedWatch Tool at 7:15 am HK/SIN time.
McCarthy said that any indications of a further three hikes this year could disrupt equity markets.
Over on Wall Street, stocks closed mildly lower, as energy stocks plunged.
The Dow Jones industrial average fell 0.21 per cent to close at 20,837.37, weighed down by Chevron.
The S&P 500 closed down 0.34 per cent at 2,365.45, with energy leading 10 sectors lower.
The Nasdaq composite ended down 0.32 per cent at 5,856.82.
European political headlines are another sideshow capturing the market’s attention.
In France, presidential candidate Francois Fillon was put under formal investigation on suspicion of embezzling state funds.
Meanwhile, a spat between the Netherlands and Turkey dragged on.
Turkish President Tayyip Erdogan warned the Netherlands that his country could take further steps in the diplomatic row, while a government spokesman in Ankara said economic sanctions could be on the table.
Jussi Halla-aho, member of the European parliament and front-runner in the race to lead Finland’s second largest political party said he would seek an exit from the euro zone and the European Union, Reuters reported.
The dollar remained relatively strong against the basket of currencies, trading at 101.68 at 8:10 am HK/SIN, above levels around 101.4 seen yesterday.
The yen traded stronger at 114.68 against the greenback versus yesterday’s highs above 115, while the Australian dollar was at $0.7565.
During Asian hours, oil prices recouped some of their losses overnight. US crude was up 1.4 per cent at $48.39 a barrel while Brent crude added 1.1 per cent to $51.48 by 8:10am HK/SIN.
Oil prices dropped to three-month lows on Tuesday during US hours, after the Organization of Petroleum Exporting Countries (OPEC) reported a rise in global crude stocks and a surprise output jump from Saudi Arabia.
US crude had fallen to its lowest settlement price on Tuesday since November 29 — a day before OPEC’s supply cut deal.