Japan's Nikkei loses ground as investor focus shifts to BOJ, Fed meetings

Japan's Nikkei 225 Index fell 1% to 50,491.87, influenced by rising domestic interest rate expectations and an 18-year peak in Japanese government bond yields. Investors are focused on upcoming BOJ and Fed meetings, with speculation of a BOJ rate hike and high odds of a Fed rate cut. Major decliners included Trend Micro and Bridgestone, while Ibiden and SoftBank Group were among the gainers.

Recap: Japan household spending drops sharply, adding pressure ahead of BOJ rate decision

Japan's household spending dropped sharply in October, falling 3.0% year-on-year, raising concerns about consumer demand resilience. This decline comes as the Bank of Japan considers a rate hike amid persistent inflation and a weak yen. The spending weakness was noted in food, leisure, and auto-related areas, but overall demand is still in a recovery stage. Economists caution that soft consumption may limit the pace of rate tightening beyond December.

The Nikkei 225 index opened down 0.9%, and the Seoul Composite Index opened down 0.1%

The Rise In Japanese Bonds Is Starting To Pressure The Global Bond Market

Japanese bond yields have risen, reaching highs not seen in over a decade, due to the Bank of Japan's policy shift. The BoJ ended its Yield Curve Control, allowing market forces to set long-term rates, and raised its policy rate for the first time in 17 years. This change pressures global bond markets, potentially leading to higher yields and affecting international investments.

Preview: Forecasters See Japan Q3 GDP Revised Lower to -0.5% on Quarter on Weaker Capex, Public Investment; GDP Skewed Down by Tariff Effects

Japan's revised GDP for Q3 2025 is expected to show a deeper decline of -0.5% q/q, down 2.1% annualized, due to weaker capital expenditure and public investment. The preliminary estimate was -0.4% q/q, down 1.8% annualized. The decline is driven by reduced exports following U.S. tariffs. Domestic demand is expected to contribute -0.3 percentage points, with capital expenditure slowing to +0.3% and public investment falling to -0.6%.