Asian equities could trade lower after choppy price action on Wall Street amid thinner liquidity conditions on holidays in the US, Japan, and South Korea. Headwinds for risk assets also come from a cautious sentiment due to geopolitical tensions in the war between Russia/Ukraine. Technical trades and fundamental adjustments on equities could be seen as investors are now keeping a close eye on the US earnings releases that kick off this week where a downbeat sentiment on earnings and forward projects is waiting due to high yields and growth expectations being adjusted lower in high inflation scenario that will hurt economic growth in the coming months.
On the macro front, it is worth noting that the Yen weakened to around the 145.85 level against the Dollar, and traders are keeping their eyes on potential FX intervention with the pair back to near the region when the Ministry of Finance intervened in September. A stronger dollar is also weighing on the Yuan as the offshore cross rose above 7.15 amid the US enforcing export rules on the Chinese chip sector. Semis will continue to be watched and under pressure after the US issued export controls to cut China off from specific semiconductor chips made anywhere in the world with US equipment.
