The Federal Reserve's unanimous 25bp hike on September 16 — lifting the target range to 3.75%–4.00% — was accompanied by a dot plot in which 16 of 18 policymakers signalled at least one further hike by year-end, cementing a higher-for-longer posture that drove the US 2-year yield up 7bp to 4.74% and pushed the 10-year through the 5.01% handle. The VIX collapsing 12.82% to 15.44 on the subsequent session reflects a market that has re-priced the hike as a credibility-affirming event rather than a shock, with equities rebounding sharply — S&P 500 +1.14% to 7,637.76, Nasdaq +1.69% — as longer-end yields steadied and Brent crude eased 1.63% to $104.11/bbl on restored Saudi pipeline capacity. The Bank of England's September 17 hold at 3.75%, paired with hawkish forward guidance and a pause in active gilt sales, further signals that developed-market central banks are in a synchronised tightening or prolonged hold phase driven by energy-embedded inflation.
For Asia-Pacific, the pressure points are concentrated and specific. The yen's slide to 155.96 per dollar (+0.45% on the day) raises the stakes materially for the Bank of Japan's widely anticipated 11:30 JST rate decision today — a hike to 1.25% is priced, but the BoJ's post-hike communication must credibly address yen weakness or risk a disorderly move; the Nikkei VIX remains elevated at 28.44 even after a 7.30% decline. The KOSPI's +1.37% outperformance and KRW weakness to 1,380.79 per dollar (+1.26%) reflect divergent currents — semiconductor demand underpinning equities while the currency absorbs dollar strength. CNY held relatively firm at 6.7069 (-0.06%), consistent with PBOC management, but Shanghai's +0.71% and Hang Seng's muted +0.19% gains signal that China's domestic demand concerns and the HKMA's Fed-linked rate move are limiting upside for China-exposed assets. Copper's 2.81% surge to $6.6125/lb and silver's 2.29% gain to $65.76/oz inject a constructive signal into Australian materials names, even as the AUD slipped 0.18% to $0.7113 against a broadly strong dollar.