Japan stocks set to rise as investors await Fed decision, watch China’s Covid situation

SINGAPORE — Shares in Japan looked set for a higher start on Wednesday following gains on Wall Street, as investors watch for developments around the Covid situation in China as well as the upcoming rate decision by the U.S. Federal Reserve.

The Nikkei futures contract in Chicago was at 25,500 while its counterpart in Osaka was at 25,450. That compared against the Nikkei 225’s last close at 25,346.48.

Australia’s S&P/ASX 200 climbed 0.46%.

Investors will monitor moves in Chinese stocks on Wednesday after they led losses among Asia-Pacific markets yesterday. The Hang Seng index in Hong Kong tumbled nearly 6% to close at its lowest since Feb. 2016.

That comes as China grapples with its most severe Covid outbreak since the height of the pandemic in 2020, with major cities scrambling to limit business activity.

Overnight stateside, the Dow Jones Industrial Average jumped 599.10 points, or 1.82%, to 33,544.34. The S&P 500 index climbed 2.14% to 4,262.45 while the tech-heavy Nasdaq Composite surged 2.92% to 12,948.62.

The U.S. Federal Reserve is set to announce its latest interest rate decision Wednesday stateside. The central bank is widely expected to raise rates by a quarter point, its first hike since 2018.

Meanwhile, the Russian state is due to pay $117 million in interest on two sovereign eurobonds on Wednesday, the first of four payment dates to creditors in March alone as the country faces the prospect of defaulting on its debt. That comes as international sanctions on Russia’s central bank have blocked off a substantial portion of the country’s foreign exchange reserves following Russia’s invasion of Ukraine.


The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.097 — still above levels below 98 seen last week.

The Japanese yen traded at 118.28 per dollar, still weaker as compared with levels below 116.1 seen against the greenback last week. The Australian dollar was at $0.7192 after recently slipping from above $0.72.

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— CNBC’s Elliot Smith contributed to this report.

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