Nikkei 225 slides as Asian markets split on oil surge, Fed pause

Asian equities opened on Thursday on a divided note, with traders still grappling with some major pressures.

The market is still weighing the impacts of a fresh surge in oil prices and the Federal Reserve’s April 29 decision to keep US rates unchanged.

Brent crude climbed to around $122.53 a barrel, and US West Texas Intermediate held near $107.09, a move that revived concerns about inflation.

The Fed’s hold, delivered after a sharply split meeting, added to the sense that policy is not about to turn easier any time soon.

That left regional investors picking through the data rather than embracing risk across the board.

Japan and Australia set the cautious tone

Japan was the weakest of the major early movers as the Nikkei 225 fell 0.91% and the Topix declined 1.48% in the opening snapshot.

The move signals that investors were quick to pare exposure in a market sensitive to higher energy costs, a softer global growth outlook and a firmer dollar.

Australia also started under pressure, with the S&P/ASX 200 down 0.43%, reflecting a familiar pattern in which higher crude prices feed directly into local inflation concerns.

Hong Kong remained soft as well, with the Hang Seng slipping 0.36%, leaving the north Asian and Australia pocket of the market in defensive mode.

South Korea and China keep the region from sliding further

The broader picture was not uniformly negative.

South Korea held up better, with the Kospi rising 0.36% even as the smaller Kosdaq fell 0.25%, suggesting that investors were still willing to back the larger, more liquid names.

Mainland China also showed relative steadiness, with the CSI 300 adding 0.21%.

That matters because it shows the session was shaped more by selective buying than by a wholesale retreat from risk.

Investors gravitated toward markets backed by strong earnings or policy support, while quickly pulling back from those more vulnerable to inflation and external headwinds.

Oil, bonds and the Fed are doing the real work

The dominant force behind the session remains the oil shock.

Brent’s jump was tied to renewed concern over supply disruption in the Middle East, and the move pushed US Treasury yields to a one-month high as investors recalibrated the inflation path.

The Fed backdrop matters because it arrived just as markets were already leaning hawkish.

The US dollar strengthened after Wednesday’s decision, and traders now have less room to assume that policy easing is coming quickly.

That combination helps explain why Asia is not trading in a simple risk-off line.

Instead, investors are rotating carefully, favouring areas with visible earnings support while keeping a tighter grip on markets more exposed to fuel costs and tighter financial conditions.