Nikkei Opens Higher; Fed and BOJ Decisions Key

Japanese stock markets opened higher in Wednesday's trading (Sept. 16). The Nikkei 225 average traded at 63,758.50, up approximately 0.43% from the previous close of 63,484.10. However, early trading remained volatile, and the index pared some of its gains shortly after the opening.

Investor sentiment remained weighed down by Wall Street's weakness in the previous session. The Dow Jones closed down 0.63%, the S&P 500 fell 0.45%, and the Nasdaq lost 0.78% after a surge in Treasury yields and oil prices heightened concerns regarding inflation and global interest rates.

On the domestic front, Japanese trade data revealed a deficit of 1.105 trillion yen in August—exceeding the forecast of 1.052 trillion yen and widening from the 638.3 billion yen deficit recorded in July. Imports surged 28% year-on-year, driven primarily by a sharp rise in energy costs, while exports grew by 19.3%.

The spike in energy import costs is a point of concern, given Japan's heavy reliance on foreign oil supplies. High oil prices could sustain inflationary pressure and reinforce expectations that the Bank of Japan will raise interest rates again at its meeting this Friday. Meanwhile, markets are also awaiting the Federal Reserve's decision, with a rate hike widely anticipated for Wednesday.