Dow Jones & Nasdaq 100 Ease as BoJ Minutes Weigh in Asia

Despite the morning pullback, the outlook remains constructive for US equity futures, with strong economic momentum in Q3 countering concerns over sticky inflation.

Below, I’ll outline the key market drivers, the medium-term outlook, and the key technical levels traders should watch.

Bank of Japan Meeting Minutes Reveal a Hawkish Undertone

The Bank of Japan’s October meeting minutes garnered more interest than usual on Wednesday, given last week’s interest rate hike.

Discussions about price stability, wage growth, and easing US tariff-related risks to the Japanese economy highlighted key considerations for policymakers going into 2026. An improving macroeconomic backdrop and rising prices would likely support further rate hikes.

The meeting minutes stated that the Bank would continue to raise rates, given that real interest rates were at significantly low levels, contingent on economic activity and prices aligning with the Bank’s outlook.

A more hawkish BoJ rate path would narrow US-Japan rate differentials in favor of the yen, making yen carry trades less profitable. However, third-quarter GDP and price deflator numbers from the US tempered bets on a March Fed rate cut, easing risks of a yen carry trade unwind. Notably, the Nikkei 225, a barometer of Asian market sentiment, rose 0.22% in morning trading.