Japan’s Nikkei leads losses in Asian markets ahead of the Fed, BoJ rate decision

• Asian stock equities trade mixed ahead of the key events from the US and Japan.
• The likelihood that the Bank of Japan (BOJ) might tweak its yield curve control (YCC) policy weighs on Japanese equities.
• The Chinese NBS Manufacturing PMI is expected to grow to 50.4 from the previous reading of 50.2.
• Market players will closely monitor the BoJ and Fed policy meetings.

Most Asian stocks trade mixed on Monday. Investors await the highly-anticipated Bank of Japan (BoJ) monetary policy meeting on Tuesday and the Federal Reserve (Fed) interest rate decision on Wednesday. These events could trigger volatility across the financial markets.

At press time, China’s Shanghai is up 0.17% to 3,022, the Shenzhen Component Index climbs 1.53% to 9,920, Hong Kong’s Hang Sang loses 0.28% to 17,349, South Korea’s Kospi gains 0.45%, India’s NIFTY 50 is down 0.43%, and Japan’s Nikkei leads losses by dropping 1.26%.

The speculation that the Bank of Japan (BOJ) might tweak its yield curve control (YCC) policy exerts pressure on Japanese equities. Many analysts believe the central bank will raise its inflation forecast to 2.0%, but they are divided on whether it will ultimately abandon YCC.

The Chinese NBS Purchasing Managers' Index (PMI) will be due on Tuesday. The nation’s Manufacturing PMI is expected to grow to 50.4 from the previous reading of 50.2. The stronger economic data might alleviate the fear of an economic slowdown in the world's second-largest economy.

On the Aussie front, consumer spending in Australia came in better than expected. The country’s Retail Sales climbed by 0.9% MoM in September, as against August’s 0.2% increase, better than the market expectation for an increase of 0.3%.

The BoJ and Fed rate decisions will be in the spotlight this week. Furthermore, market players will monitor Malaysia’s monetary policy decisions, South Korea's inflation, and Hong Kong's GDP later this week.