Stocks in the overnight session moved lower, BOJ hiked rates for the first time in 17 years

Tuesday saw a general decline in Asian equities due to ongoing concerns over the Federal Reserve meeting. However, Japan's Nikkei 225 recovered some of its early losses following the Bank of Japan's rise in interest rates while keeping a dovish outlook.

A strong Wall Street overnight finish did little to lift regional markets, as U.S. stock index futures declined in Asian trade after a modest tech rebound ran out of steam.

One of the primary causes of concern for markets continued to be the expectation of possibly hawkish signals from the Fed. On Wednesday, the bank is anticipated to maintain unchanged rates, but given persistent inflation, it may become more aggressive.

The BOJ announced the end of its yield curve management measures, including its open market asset acquisition programme, and raised interest rates by 0.1%, marking the first rate increase in 17 years.

Even yet, the central bank indicated that despite ongoing worries about the fragility of the Japanese economy, monetary conditions will likely stay quite supportive.

Although momentous, Tuesday's action only represents a little tightening of monetary policy, maintaining most of the liquidity that Japanese markets have been enjoying for almost a decade.

Positive outcomes were also obtained from other regional central bank meetings. After the Reserve Bank of Australia maintained interest rates at current levels but sounded less hawkish than markets had anticipated, Australia's ASX 200 index increased by 0.3%. There was no longer a warning from the RBA that interest rates would rise further.

This week also marks the People's Bank of China's decision on its benchmark lending prime rate; on Wednesday, the PBOC is anticipated to maintain the current rate.

Furthermore, big Asian tech stocks fell, especially those that were exposed to AI, following an aftermarket decline in NVIDIA, the industry leader in AI. Following the company's launch of its newest line of AI processors, Nvidia's post-market trading saw a nearly 2% loss.

At a developer conference on Monday, Nvidia debuted Blackwell, their newest series of AI processors. However, the AI champion gave no indications regarding the chips' cost.

(Sources: investing.com, reuters.com)