Tokyo, Japan – Asian equity markets saw a decline as Meta Platforms Inc.’s unsatisfactory forecast sparked concerns about the sustainability of the industry that has been propelling the bullish momentum in equities. The benchmark indexes in Japan and South Korea dropped, and futures for Hong Kong also experienced a decline. Meanwhile, Australian financial markets were closed for a holiday. The yen traded within a narrow range, weakening past 155 per dollar for the first time in over three decades on Wednesday, raising possibilities of intervention.

Following the disheartening outlook from Meta, a $250 billion exchange-traded fund mirroring the Nasdaq 100 took a hit after the close of regular trading in the US as the parent company Facebook plummeted by over 15%. Meta projected second-quarter sales that fell short of analyst expectations and raised its spending estimates for the year, leading to concerns among investors.

Experts like Sophie Lund-Yates from Hargreaves Lansdown Plc noted that while Meta’s resources are vast, they are not infinite, and the bold language surrounding spending plans may have spooked the markets. This news comes amid the S&P 500 struggling to gain traction and Treasury yields experiencing a rise.

In the realm of currencies, the yen in Japan weakened significantly, crossing the 155 level against the dollar for the first time since June 1990. Market participants are keeping a close eye on any comments from officials in Tokyo that might suggest a readiness for intervention to address the challenges posed by the weakened currency.

Japan Airlines Co.’s CEO mentioned that Japan’s weak currency is a significant issue and expressed that a stronger yen rate would be preferable. At the same time, South Korea’s SK Hynix Inc. anticipates a full recovery in the memory market, driven by increased demand for AI technology.

Other market movements include oil holding a modest decline, counteracted by a risk-off sentiment in broader markets, while gold remained relatively stable. Furthermore, earnings reports from the Facebook parent indicate positive growth, with revenue increasing by over 27% in the first quarter compared to the previous year.

Analysts like Tejas Dessai from Global X ETFs emphasized the company’s continued strength in fundamentals, advising investors to focus on the positives. However, experts like Mark Hackett from Nationwide pointed out that tech megacaps may experience decreasing advantage in the future, leading investors to diversify away from recent market leaders.

Traders have been adjusting their expectations regarding Federal Reserve rate cuts as resilient economic data continues to emerge. Economists foresee a potential cooling of gross domestic product in the first quarter, hinting at persistent inflationary pressures. Market participants eagerly await the GDP data report as they navigate the implications for future rate cuts and revenue growth prospects.

Key events to monitor this week include US GDP, wholesale inventories, and initial jobless claims on Thursday, as well as a Japan rate decision, Tokyo CPI data, and US personal income, spending, and consumer sentiment data on Friday. Stock futures in the S&P 500, Hang Seng, S&P/ASX 200, and Japan’s Topix showed declines in early trading, while various currencies and cryptocurrencies experienced minimal changes in value.

As the region navigates through market fluctuations and economic data releases, investors and analysts remain vigilant for any shifts that may impact investment strategies and overall market sentiment.