Asia rallied overnight but every desk is really just marking time until 2pm ET.
Tokyo led, the Nikkei adding roughly 440 points back above 63,900 as beaten-down AI and chip names stabilized after a two-day rout tied to slower-development chatter from Anthropic and OpenAI; SoftBank swung both ways intraday. Hang Seng and Shanghai firmed modestly, and Kospi tracked the region higher on Hynix and Samsung strength. USD/JPY sits near 154.50-155.50, yen soft for a second session as dollar demand builds ahead of the Fed, but upside is capped with the BOJ carrying an 80% priced hike odds of its own on Friday. USD/CNH is quiet, tracking the JPY move with no independent PBOC signal.
US futures are higher into the open, clawing back part of a six-of-seven-day losing stretch, with prediction markets leaning roughly 60% for a green tape today. That's the easy part. The FOMC decision lands at 2pm ET with a 25bp hike to 3.75-4.00% priced above 90%, the first hike in three years, alongside a fresh dot plot and Warsh's 2:30pm presser. The setup is unusual: a hike is expected because oil-driven inflation, not overheating growth, is forcing the Fed's hand, with the 10-year having brushed 5% for the first time since 2007 and WTI still above $100 on the Saudi pipeline shutdown and Iran conflict.
The risk: a hike paired with any hawkish dot-plot shift or vague guidance re-accelerates yields and unwinds the overnight Asia bid fast; a hold, or a hike with reassuring language on the energy shock being transitory, is the path that lets equities hold the bounce.