Asian stocks got off to a positive start on Monday ahead of the Federal Reserve’s policy meeting later in the week, while the dollar broke past the psychologically key level of 160 yen for the first time in decades. Oil prices ticked down on expectations that higher-for-longer US interest rates would dampen demand, while news of a potential Gaza ceasefire eased fears of supply constraints. The dollar touched a high of 160.245 yen – its strongest level in 34 years – in a sudden but brief surge during Asia hours. It was last 0.5% higher at 159.14 yen. Some analysts attributed the move to thinned liquidity with Japan out for a holiday on Monday, and as traders looked to test the resolve of Japanese authorities in defending the yen. Despite the yen’s continuous slide towards fresh multi-decade lows, Tokyo has so far resisted intervening in the currency market, even as officials ramp up their warnings against excessive yen moves. “Markets are testing the upside,” said Christopher Wong, a currency strategist at OCBC, of the dollar/yen currency pair. The BOJ had on Friday kept interest rates around zero at the conclusion of its monetary policy meeting and ruled out shifting to a full-fledged reduction in the BOJ’s bond purchases, striking a more dovish tone than some had expected. That, and bets the Fed is likely to delay the start of its rate-cutting cycle, provided fresh impetus to yen bears. In the broader market, MSCI’s broadest index of Asia-Pacific shares outside Japan tacked on 0.56%, helped by Wall Street’s positive lead on Friday owing to a rally in megacap growth stocks. The upbeat sentiment spilled over into the new week, with Nasdaq futures and S&P 500 futures each rising 0.2%. Hong Kong’s Hang Seng Index similarly advanced 0.77%, while China’s blue-chip index edged 0.06% higher. Asia stocks rise, yen falls as BOJ stands pat on rates The Fed’s two-day monetary policy meeting beginning Tuesday takes centre stage for the week, where expectations are for the central bank to keep rates on hold. Focus, however, will be on any guidance for the central bank’s rate outlook, after repeated runs of stronger-than-expected US economic data and still-sticky inflationary pressures derailed market bets on how soon the Fed could commence its rate easing cycle. Market pricing shows a first Fed rate cut is expected in September, from a June start only a few weeks ago, with just over 30 basis points worth of easing expected this year. “We’ve seen quite a significant repricing of rate expectations in the US, and that’s kind of a benchmark for global interest rates,” said Jarrod Kerr, chief economist at Kiwibank. “I think the Fed this week will kind of echo those comments that rate cuts aren’t as close as they had hoped.” The prospect that US rates would remain in restrictive territory for longer have propped up the greenback, though it was broadly on the back foot on Monday, edging lower against most currencies apart from the yen. Against the dollar, the euro rose 0.21% to $1.0715, while sterling gained 0.23% to $1.2522. The dollar index was little changed at 105.98, though was headed for a monthly gain of 1.4%. In commodities, Brent fell more than 1% to $88.55 a barrel, while US crude similarly eased 1% to $83.02 per barrel. Both are up about 15% for the year, in part due to supply disruption fears amid escalating geopolitical tensions in the Middle East. A Hamas delegation will visit Cairo on Monday for talks aimed at securing a ceasefire, a Hamas official told Reuters on Sunday, as mediators stepped up efforts to reach a deal ahead of an expected Israeli assault on the southern city of Rafah. Gold dipped 0.34% to $2,329.37 an ounce.