Japanese stocks experienced a surge on Wednesday, with the Nikkei index rising 0.9% to 40,762.73, approaching its all-time high. This gain was attributed to the yen's depreciation to its lowest level since 1990, reaching 151.975 to the dollar. Japan's finance minister issued a warning of "decisive action" in response to the yen's weakness.
In contrast, Chinese markets faced a decline, with Hong Kong's Hang Seng index dropping 1% and mainland Chinese blue chips losing approximately 0.7%. Overall, MSCI's Asia-Pacific index gained 0.1%, but this turned into a 0.17% decline when Japanese shares were excluded.
Analysts attributed the lack of clear direction in regional markets to rebalancing flows and the anticipation of key events on Friday, including the release of U.S. inflation data and comments from Fed Chair Jerome Powell. The U.S. dollar index remained steady, while the euro and sterling experienced slight fluctuations.
Meanwhile, Sweden's Riksbank was expected to hold its policy rate unchanged, but markets were seeking hints of a potential rate cut by June. Gold prices remained stable, while crude oil prices declined for a second day due to reports of increased crude stockpiles in the U.S. and indications that major producers would maintain their current output policy.