Asian markets may face downward pressure following a challenging day on Wall Street, where initial gains in US equities were negated by persistent concerns about possible interest rate hikes, as indicated by recent remarks from Federal Reserve’s John Williams. Although Williams mentioned that rate hikes are not part of his main expectations, his comments have unsettled investors. Additionally, today’s $1.2 trillion options expiry in the US could contribute to this bearish sentiment, as it typically prompts market participants to adjust their equity holdings, exerting further downward pressure on stocks.
The semiconductor and technology sectors in the Asia-Pacific are also in focus, particularly after significant declines led by Taiwan Semiconductor Manufacturing Company (TSM) following its earnings release. Despite strong quarterly results, TSM’s reduced outlook for the semiconductor industry has exacerbated the sell-off in tech stocks. On the economic front, the agenda is relatively light, with market participants awaiting the Japanese Consumer Price Index (CPI). A disappointing outcome could exert additional downside pressure on the Japanese yen (JPY) and boost equities. Today’s market activities are likely to be influenced by the upcoming speech from Austan Goolsbee before the Federal Open Market Committee (FOMC) enters its blackout period, and by geopolitical tensions between Israel and Iran, which have intensified following Iran’s heightened rhetoric and Israel’s deferred military actions.
