Asia stocks dip amid election uncertainty; Japan extends gains ahead of BOJ

Investing.com– Most Asian stocks fell on Wednesday as risk appetite was quashed by anticipation of a tight U.S. presidential election and a barrage of key economic readings this week.

Japanese markets remained the outliers, extending recent gains as heightened political uncertainty in the country fueled more bets that the Bank of Japan will not raise interest rates further.

Regional markets took middling cues from Wall Street, where buying into technology stocks put the at record highs, while most other sectors sank on Tuesday.

But Wall Street futures rose in Asian trade, underpinned by strong earnings from Alphabet Inc (NASDAQ:). Tech majors Meta Platforms Inc (NASDAQ:) and Microsoft Corporation (NASDAQ:) are set to report on Wednesday, while Amazon.com Inc (NASDAQ:) and Apple Inc (NASDAQ:) are due on Thursday.

A slew of key U.S. economic readings are also due in the coming days, while the is set to meet next week.

Japan’s Nikkei surges on tech gains, BOJ anticipation 

Japan’s index was the best performer in Asia on Wednesday, rising more than 1%, while the index added 0.8%. Gains in technology stocks were a key boost to the Nikkei, with local tech majors tracking gains in their U.S. peers.

Japanese markets extended recent gains after the ruling Liberal Democratic Party lost its parliamentary majority in the recent elections, presenting an uncertain outlook for local politics.

But this scenario fueled bets on more fiscal spending by the Japanese government, while increased uncertainty is also expected to keep the BOJ from raising interest rates further. The slid on this notion, benefiting local stocks with export exposure.

The BOJ is widely expected to on Thursday, and is expected to face increased political resistance over future rate hikes. 

Chinese stocks muted with PMIs, stimulus cues on tap 

China’s and indexes moved in a flat-to-low range, while Hong Kong’s index lost 0.4%. 

Focus this week was squarely on readings from the country, due on Thursday and Friday, for more cues on Asia’s largest economy, as it grapples with sluggish growth.

Beijing had announced a string of major stimulus measures over the past month, drumming up limited optimism among investors. Markets are now awaiting more cues on fiscal stimulus from a meeting of China’s National People’s Congress, set for next week. 

Broader Asian markets were mostly negative, as risk sentiment remained strained. Havens such as gold hit a record high on Wednesday.

Australia’s fell 0.6% after third-quarter data showed remained sticky, potentially eliciting a hawkish stance from the Reserve Bank of Australia. The next week.

South Korea’s fell 0.2%, with local chipmaking stocks tracking a 8% slide in AMD (NASDAQ:) after the chipmaker presented a disappointing outlook for the current quarter. 

Futures for India’s index pointed to a flat open, after some positive earnings helped the index break an extended losing streak this week.