Nikkei 225 Plummets as Traders Bet on Fed, BoJ Rate Hikes

The Nikkei 225 Index is at risk of hitting 62k as traders bet on rate hikes by the Federal Reserve and the Bank of Japan. The US central bank is expected to raise interest rates, with over 90% of economists polled by CNBC predicting a hike to between 3.75% and 4%, its highest level in a year. The Bank of Japan is also seen hiking rates by 25 basis points on Friday.

The rising bond yields in the US and Japan are driving investors away from the stock market, with the ten-year yield in Japan reaching its highest level in decades at 3.03%. The Nikkei 225 Index has some highly bearish technicals, having moved below the 50-day Exponential Moving Average (EMA) and remaining below the Supertrend indicator.

The AI slowdown jitters are also affecting Japanese stocks, with Softbank and Kioxia dropping by 1.53% and 3.71%, respectively, while Tokyo Electron and Advantest rose by over 1%. Analysts are divided on the impact of the AI safety fears on the industry.