Stocks in Asia Poised to Edge Down, Yen in Focus: Markets Wrap

The yen surged to its strongest level since February on Tuesday, extending Monday's rally as traders price in a likely Bank of Japan interest-rate hike next week. Asian equity markets found support from gains in South Korean chip stocks despite broader caution heading into the BOJ decision.

The currency move reflects a sharp shift in BOJ policy expectations, with money markets now anticipating the central bank will raise rates at its upcoming meeting. The yen's strength comes as the BOJ edges closer to normalizing policy after years of ultra-loose monetary settings, creating a divergence with other major central banks.

South Korean chipmakers lifted regional indices, though overall sentiment remained subdued as investors weigh the implications of tighter Japanese monetary policy for carry trades and cross-border capital flows. The BOJ meets next week, with the decision expected to trigger volatility across yen pairs and Japanese equities.