The Japanese stock market has declined over two consecutive sessions, shedding more than 940 points or 2.3 percent. As a result, the Nikkei 225 index now hovers slightly above the 39,000-point mark. However, there's optimism that Wednesday might bring some recovery.
Globally, Asian markets are expected to trend positively in anticipation of the FOMC's rate decision later today. While European markets displayed mixed results, U.S. markets saw an upward trend, a path that Asian markets are likely to follow.
On Tuesday, the Nikkei closed significantly lower, affected mainly by losses in the automobile and technology sectors, although the financial sector experienced mixed results. The index fell by 548.93 points or 1.39 percent, concluding at 39,016.87 after fluctuating between 38,886.05 and 39,448.55 during the session.
Regarding individual stocks, Nissan Motor dropped by 1.56 percent, Mazda Motor by 1.66 percent, Toyota Motor slid 1.11 percent, Honda Motor decreased 0.33 percent, and Softbank Group notably fell 5.22 percent. Conversely, Mitsubishi UFJ Financial gained 2.52 percent, Mizuho Financial rose 2.79 percent, Sumitomo Mitsui Financial increased by 2.18 percent, while Mitsubishi Electric fell 1.80 percent, Sony Group surged 2.94 percent, Panasonic Holdings declined 0.66 percent, and Hitachi saw a significant drop of 6.39 percent.
Over on Wall Street, the outlook was positive; despite a slightly lower opening on Tuesday, the major averages rebounded and maintained strong growth throughout the session. The Dow Jones Industrial Average gained 136.77 points or 0.31 percent to close at 44,850.35, while the NASDAQ improved by 391.75 points or 2.03 percent, ending at 19,733.59. The S&P 500 increased by 55.42 points or 0.92 percent to finish at 6,067.70.
The momentum on Wall Street was primarily driven by investors capitalizing on lower technology stock prices after a previous sector sell-off. However, market enthusiasm was tempered as traders awaited the Federal Reserve's forthcoming monetary policy statement. While it is anticipated that interest rates will remain unchanged, the accompanying statement will be closely analyzed for future rate indications.
In the realm of economic developments, the Commerce Department reported a steep decline in new orders for U.S. manufactured durable goods for December. Additionally, the Conference Board's report indicated a decrease in U.S. consumer confidence from a considerably upwardly revised level in January.
Oil prices increased on Tuesday due to supply interruptions from Libya, where protesters blocked tankers from loading at two of the country's major ports. February futures for West Texas Intermediate crude oil rose by $0.60, roughly 0.82 percent, settling at $73.77 per barrel.
Returning to Japan, the Bank of Japan is set to release the minutes from its December 18 and 19 monetary policy meeting. At this meeting, the policy board voted 8-1 to maintain the uncollateralized overnight call rate at approximately 0.25 percent.
