Asian equities could trade on the backfoot as global equities were pressured after the recent measures by global central banks, with technical trades on the radar ahead of the weekend. The SNB and BoE followed in the Fed’s footsteps in hiking rates. At the same time, investors reassessed growth expectations with energy stocks leading losses and particular downside noted in recession-sensitive consumer discretionary names. Technical flows are also putting pressure on FX, bonds and equities amid today’s Quadruple Witching.
Bank of Japan will be the main risk event in the session before Fed Chair Powell speaks just after this week’s FOMC. The BoJ is expected to keep policy settings unchanged with rates at -0.10% and QQE with yield curve control to flexibly target 10yr JGB yields at 0%. Fast JPY devaluation has prompted speculation the BoJ may need to rethink its policy. However, Governor Kuroda previously stated that he doesn’t think the rapid Yen weakening was caused by BoJ easing.
