Asia Stocks Declines Ahead of Federal Reserve Meeting

Asia markets opened lower on Wednesday after Japan’s central bank held back from unleashing new stimulus measures, and as investors look ahead to the Federal Reserve meeting.

Japan’s benchmark Nikkei and the broader Topix both opened 0.7% lower.

After falling iron ore prices dragged on mining shares Australia’s S&P/ASX 200 was trading flat.

South Korea’s Kospi was 0.3% higher despite data showing the unemployment rate hit a five-year high in February.

The rate rose to 4.1% from 3.5%, which was higher than economist expectations, due to a contraction in the manufacturing and construction sectors.

Both the Shanghai Composite and Hong Kong’s Hang Seng were up about 0.2% after an hour of trade.

Analysts say the market is now focused on the two-day Federal Reserve meeting which concludes on Wednesday.

The rate-setting committee is expected to keep borrowing costs on hold but its economic commentary will be closely scrutinised for hints about future moves.

“Another hike is sharply at odds with Fed concerns about increased uncertainty around global/China outlook and market turbulence tightening credit conditions,” Vishnu Varathan from Mizuho Bank said.

He said that attention was focused on any hints the bank might make about the frequency of interest rate rises this year, which in December suggested four rounds of 25 basis point rises, whereas the market currently expects no more than one increase.