Overnight tape was a split decision — Japan sold off on yen strength, China bought the stimulus story, and the rest of the region drifted ahead of Wednesday's Fed decision.
Nikkei 225 slipped roughly 0.6-0.9% as USD/JPY pressed back toward the mid-145s, squeezing exporters and reviving intervention chatter out of the MOF; KOSPI was little changed, semis (Samsung, SK Hynix) offsetting weak autos on won strength. Hang Seng and CSI 300 both firmed, the latter up close to 1%, as mainland property and brokerage names extended a rally built on fresh PBOC liquidity signals and expectations of further reserve-ratio easing before Golden Week. USD/CNH held a tight range near 7.10-7.12, capped by state-bank dollar selling. Cross-asset read: Treasuries were quiet in Asia hours, 10-year yield pinned near 4.05-4.10%, with the front end doing all the work into the FOMC — futures pricing a cut this week close to fully baked in, debate is 25 vs 50bp and the dot-plot path for 2027.
Read-through to the US open is cautious-constructive: a firmer yen and softer dollar broadly support the reflation/small-cap trade if the Fed delivers a dovish cut, but positioning is stretched into the print and any hawkish surprise on the dots gets amplified by thin dealer gamma. Watch USD/JPY as the tell — a break under 145 pressures carry unwinds that have bled into US tech beta before.
The risk: a hot retail sales or PPI surprise this morning, or a Fed that cuts but signals a pause, flips the dollar bid, yen weakens again, and Asia's carry-trade calm reverses hard into a US risk-off close.