Asian stocks mixed ahead of Fed decision; Nikkei slides on surging yen

Asian equities traded mixed on Monday as investors positioned ahead of a pivotal Federal Reserve policy meeting later this week and awaited major technology earnings, while Japanese shares fell sharply as the yen strengthened.

U.S. stock indexes ended last week lower, and futures linked to Wall Street declined further during Asian trading on Monday.

Nikkei tumbles as yen surges

Japan’s Nikkei 225 fell nearly 2%, deepening losses in exporter stocks as the yen strengthened sharply against the U.S. dollar amid speculation that Japanese and U.S. officials could intervene in currency markets to support the battered currency.

A firmer yen typically weighs on Japanese exporters’ overseas earnings, reinforcing risk-off sentiment in Tokyo. Meanwhile, gold surged to record highs as safe-haven demand intensified, underscoring investor caution ahead of major global policy decisions.

Elsewhere in Asia, South Korea’s KOSPI slipped nearly 1% after touching an intraday record of 5,023.76 points, while China’s Shanghai Composite was little changed.

Australia’s S&P/ASX 200 added 0.1%, while Singapore’s Straits Times Index fell 0.4%.

Indian markets were closed for a public holiday.

Fed meeting and packed tech earnings slate in focus

Traders are firmly focused on this week’s Federal Reserve meeting, where officials are broadly expected to keep interest rates unchanged, with markets closely watching for any adjustment in forward guidance on future policy moves as inflation pressures persist. Remarks from Fed Chair Jerome Powell and other policymakers later in the week are likely to influence sentiment across global risk assets.

Investor attention is also fixed on a packed earnings calendar, featuring quarterly results from most of the so-called “Magnificent Seven” technology heavyweights, including Microsoft Corp (NASDAQ:MSFT), Meta Platforms Inc (NASDAQ:META), Tesla Inc (NASDAQ:TSLA) and Apple Inc (NASDAQ:AAPL), whose results often set the tone for wider markets.

In Asia, major technology names such as Samsung Electronics (KS:005930) and SK Hynix Inc (KS:000660) are also scheduled to report earnings.

Caution around AI-related stocks remains, with technology shares underperforming in some sessions amid growing concerns over elevated valuations and rising costs.

Overall, market participants remain guarded ahead of key policy and earnings catalysts, weighing optimism over artificial-intelligence-driven long-term growth against near-term macroeconomic and currency risks.

Sources: Investing