Asian equity markets are poised for a mixed trading session as investors closely monitor the Nvidia GTC event for pivotal updates. Anticipated announcements from the technology behemoth are expected to influence the microchip sector and the broader technology landscape, potentially catalysing positive momentum for companies in Asia that are closely tied to tech and artificial intelligence. This comes as Nvidia’s forthcoming revelations could prompt analysts to revise their outlooks for the upcoming quarters.
On the macro front, attention is firmly fixed on the bond market, especially in light of the climbing US Treasury yields which is driving global yields higher ahead of the Fed’s meeting. Market participants are gearing up for a series of critical policy decisions from major central banks, including the Bank of Japan (BoJ) and the Federal Reserve. The focus of today’s session zeroes in on the BoJ and the Reserve Bank of Australia (RBA). Recent reports hint at a significant policy shift by the BoJ, potentially moving away from its yield curve control measures, ETF purchases, and the negative interest rate policy (NIRP) in its imminent meeting. This speculation temporarily strengthened the Japanese Yen and contributed to the uptick in US yields. Should the BoJ withhold any major policy shifts at this meeting, but signal possible changes in April under Governor Ueda’s guidance, the market might interpret this as a hawkish stance. This could elevate the yields on Japanese Government Bonds (JGBs) and the Yen, while possibly exerting pressure on Nikkei and banking stocks. Conversely, a continuation of the status quo by the BoJ, without any hints of upcoming changes, could buoy the Nikkei index and put the Yen under pressure, especially against a backdrop of a robust US dollar and climbing US yields, with the Federal Reserve’s meeting eagerly awaited on Wednesday.
