Asian Markets Track Weak US Lead, Eyes on Yen Asian stock markets opened lower on Thursday, following a selloff on Wall Street overnight amid concerns about rising interest rates and geopolitical tensions. * Japan’s Nikkei 225: Down 1.5% * China’s Shanghai Composite: Down 0.8% * Hong Kong’s Hang Seng: Down 1.2% * South Korea’s KOSPI: Down 1.0% The Dow Jones Industrial Average and S&P 500 index both closed over 1% lower on Wednesday, weighed down by a surge in bond yields. Investors are worried that the Federal Reserve may raise interest rates more aggressively in the coming months to combat inflation. Additionally, geopolitical tensions in Ukraine and concerns about a potential Russian invasion have also dampened sentiment. In the currency markets, the Japanese yen was the focus of attention. The yen has weakened significantly against the US dollar in recent weeks, as investors anticipate a widening interest rate differential between Japan and the United States. The Bank of Japan has vowed to maintain its ultra-loose monetary policy, while the Fed is expected to tighten its policy in the coming months. This has led to increased demand for the US dollar and a sell-off in the yen. Outlook: Asian markets are expected to remain volatile in the near term as investors monitor developments in Ukraine and the trajectory of US interest rates. The yen is also likely to remain under pressure if the widening interest rate differential between Japan and the United States persists. Analysts are cautious in their outlook for Asian markets, as they see several headwinds in the form of rising inflation, supply chain disruptions, and geopolitical risks. Selective buying and focusing on defensive sectors may be a prudent strategy for investors during this period of uncertainty.This news article discusses the decline in Asian markets and the yen’s approach to a 34-year low against the dollar.This news article discusses the decline in Asian markets and the yen’s approach to a 34-year low against the dollar. Key Points: * Asian markets extended their losses from last week due to profit-taking in the tech sector and a strong US services sector report. * Investors are monitoring the yen’s movements, as it nears the low that prompted currency market intervention earlier this year. * Japanese officials have warned that they are prepared to intervene to support the yen if excessive fluctuations occur. * The next major economic indicator is the PCE index, which could influence the Federal Reserve’s monetary policy decisions. * Decision-makers have pushed back against speculation of interest rate cuts in September, but US rate uncertainty continues to pressure the yen. Image Description: The article includes an image of traders monitoring the yen’s movement. The caption reads, “Traders are keeping a close eye on the yen as it approaches the 34-year low against the dollar that saw officials step in to currency markets earlier in the year.” Additional Context: * The yen’s weakness is largely attributed to the strength of the US dollar, which has benefited from expectations of continued interest rate hikes by the Federal Reserve. * The tech sector has been a major driver of market gains in recent years, but concerns about overvaluation have led to profit-taking by investors. * The PCE index is a closely watched inflation measure that provides insight into consumer spending patterns and can influence central bank decisions.Asian markets opened lower on Tuesday, tracking a weak lead from Wall Street overnight, as investors digested the latest US economic data and awaited key central bank meetings this week. The Nikkei 225 in Tokyo fell 0.8% in early trade, while the broader Topix index lost 0.7%. In South Korea, the Kospi Composite declined 0.5%. Hong Kong’s Hang Seng Index dropped 1.1%, while the Shanghai Composite Index in mainland China slipped 0.5%. The declines came after a mixed session on Wall Street, where the Dow Jones Industrial Average and Nasdaq Composite both ended lower, while the S&P 500 managed to eke out a small gain. Investors were cautious ahead of the release of the Federal Reserve’s latest policy decision on Wednesday. The Fed is widely expected to deliver a 25 basis point interest rate hike, but traders will be looking for clues about the central bank’s plans for future tightening. Another key focus for investors will be the Bank of Japan’s monetary policy meeting on Thursday. The BOJ is expected to maintain its ultra-loose policy stance, but any signals of a potential policy shift could have a significant impact on the yen. The yen has been under pressure in recent weeks as expectations grow that the BOJ may eventually be forced to tighten policy to combat rising inflation. On Tuesday, the yen traded at around 135.50 to the US dollar, near a seven-month low. Other Asian currencies were also weaker on Tuesday, with the South Korean won and Malaysian ringgit both losing ground against the US dollar.