Asian Stock Market: Grinds lower, focus on Fed, BoJ decisions

• Most Asian stock markets trade in negative territory as markets turn cautious ahead of key events.
• The headlines of more Chinese stimulus plans fail to impress Chinese equities.
• Investors are preparing for the Bank of Japan's (BoJ) rate decision scheduled for Friday.

Most Asian stock markets trade in negative territory on Wednesday as market participants await the highly anticipated Federal Reserve (Fed) meeting later in the day. At press time, the Nikkei down 0.07%, Shanghai drops 0.37%, Hang Sang fell 0.85%, and the Kospi Index down 1.78%. While, the Nifty50 rises 0.58%.

The headlines of more Chinese stimulus plans fail to impress Chinese equities on Wednesday. The news agency Xinhua reported on Tuesday that policymakers would take up economic policy adjustments, strengthening confidence and mitigating risks after the world's second-largest economy expanded at a sluggish rate in the second quarter as demand fell.

In the meantime, Japanese stocks post modest gains. Investors are preparing for Friday's upcoming interest rate decision by the Bank of Japan (BoJ). BoJ Governor Kazuo Ueda put an end to speculation of a Yield Control Curve policy change and stated that there was still work to be done before the inflation objective of 2% was reached. These comments suggest that Japanese policymakers will likely maintain a dovish stance and are expected to keep their monetary policy unchanged on Friday.

Additionally, the Cabinet Office said that Japan’s inflation is seen at around 0.7% from 2027 to 2032, while for 2023 is expected at 2.6% and 1.9% in 2024. In terms of economic growth, the GDP figure is seen at 1.3% in 2023 and 1.2% in 2024.

The oil price currently trades around $79.00 a barrel after retreating from $79.90 a barrel, the highest since April 19. The headlines surrounding additional Chinese stimulus plans will be in focus as China is the world's largest oil importer, and its economic recovery supports the oil price.

Market participants will focus on the Fed, European Central Bank (ECB), and BoJ rate decisions later this week. Also, the developments surrounding Sino-US relations will remain in focus.