Japan Stock Market May Open Under Water On Wednesday

(RTTNews) - The Japanese stock market has finished lower in three straight sessions, shedding more than 1,780 points or 3 percent along the way. The Nikkei 225 now sits just shy of the 63,500-point plateau and it may take further damage again on Wednesday.

The global forecast for the Asian markets is negative on rising crude oil prices and treasury yields, and ahead of the U.S. rate decision later today. The European and U.S. markets were down and the Asian bourses are expected to open in similar fashion.

The Nikkei finished barely lower on Tuesday as losses among the paper, communication and technology sectors were offset by support from the financials.

For the day, the index eased 8.89 points or 0.01 percent to finish at 63,484.10 after trading between 63,067.18 and 64,101.00.

The lead from Wall Street is weak as the major averages opened lower on Tuesday and remained in the red throughout the trading day.

The Dow dropped 328.09 points or 0.63 percent to finish at 62,093.11, while the NASDAQ shed 204.84 points or 0.78 percent to end at 25,981.57 and the S&P 500 fell 34.25 points or 0.45 percent to close at 7,585.73.

The weakness on Wall Street came amid a notable increase in treasury yields, with the yield on the benchmark ten-year note reaching its highest intraday level since July 2007.

Concerns about the outlook for inflation and interest rates have driven yields higher ahead of the Federal Reserve's monetary policy decision later today. The Fed is widely expected to raise interest rates, with CME Group's FedWatch Tool currently indicating a 94.5 percent chance of a quarter-point rate hike.

A sharp increase by the price of crude oil also weighed on stocks amid reports of fresh Houthi strikes on Saudi Arabia. But traders seemed reluctant to make more significant moves ahead of the Fed's monetary policy announcement.

Crude oil prices surged on Tuesday as supply concerns mount after Saudi Arabia shut its East-West pipeline. West Texas Intermediate crude for October delivery was up $4.37 or 4.31 percent at $105.76 per barrel.

Closer to home, Japan will release July figures for core machinery orders and August data for imports, exports and trade balance later this morning. Core machinery orders are expected to sink 1.2 percent on month and climb 15.3 percent on year after rising 9.7 percent on month and 16.9 percent on year in June.

Imports are expected to jump 26.3 percent on year, easing from 27.8 percent in July. Exports are called higher by an annual 18.2 percent, down from 23.2 percent in the previous month. The trade deficit is pegged at 1.052 trillion yen following the 634.5 billion yen shortfall a month earlier.