Market tension rises as global traders await Fed rate decision and Bank of Japan hikes

Global asset prices faced pressure on Monday as rising oil costs and Middle East tensions drove crude above $100 a barrel. The U.S. dollar advanced in Asian markets while the Japanese yen climbed toward a seven-month high. Investors are closely watching upcoming rate decisions from major central banks this week, including a scheduled Federal Reserve meeting on Wednesday. Earlier reports indicated that the Bank of Japan is set to raise rates this Friday, aligning with other central banks reacting to persistent inflation risks. A Bank of Japan executive noted in conference notes that supply-side shocks require careful policy consideration due to their ability to lift underlying inflation expectations. Meanwhile, the European Central Bank kept interest rates unchanged last week but warned that further increases may become necessary.