Asian equity markets traded mixed on Monday as investors positioned cautiously ahead of a key policy decision from the U.S. Federal Reserve later this week and a wave of major technology earnings. Japanese stocks underperformed the region, pressured by a sharp rise in the yen.
U.S. equities ended last week on a softer note, and futures linked to Wall Street indexes also edged lower during Asian trading hours, setting a cautious tone across global markets.
Nikkei drops as yen surges
Japan’s Nikkei 225 index fell nearly 2%, extending recent losses in export-heavy sectors. The decline came as the yen strengthened sharply against the U.S. dollar, fueled by speculation that Japanese and U.S. authorities could intervene in currency markets to support the weakening yen.
A stronger yen typically weighs on Japanese exporters by reducing the value of overseas earnings, reinforcing risk-off sentiment in Tokyo. At the same time, gold surged to record highs, reflecting increased demand for safe-haven assets as investors prepared for major global policy events.
Elsewhere in Asia, South Korea’s KOSPI slipped nearly 1% after touching record highs earlier in the session. China’s Shanghai Composite was little changed, showing limited reaction to regional volatility.
Australia’s S&P/ASX 200 edged 0.1% higher, while Singapore’s Straits Times Index declined 0.4%. Indian equity markets were closed due to a public holiday.
Fed decision and tech earnings take center stage
Investor focus is firmly on this week’s policy meeting of the Federal Reserve, where interest rates are widely expected to remain unchanged. Markets will closely analyze forward guidance for any signals on the timing of future rate cuts, especially as inflation pressures persist.
Comments later in the week from Fed Chair Jerome Powell and other policymakers are expected to play a key role in shaping global risk sentiment.
Attention is also turning to a heavy earnings calendar, with results due from several major U.S. technology companies, including Microsoft, Meta Platforms, Tesla, and Apple. These so-called “Magnificent Seven” stocks often set the tone for broader market moves.
In Asia, major tech names such as Samsung Electronics and SK Hynix are also scheduled to report earnings.
Caution around artificial intelligence-related stocks remains evident, with technology shares underperforming in some sessions amid concerns over high valuations and rising investment costs.
Overall, investors remain defensive as they weigh long-term optimism around AI-driven growth against near-term risks tied to monetary policy, currency volatility, and upcoming earnings announcements.
