Investing.com - Asian shares were mixed on Wednesday with the upcoming release of the latest Fed views on policy leading to cautious markets.
The Federal Open Market Committee (FOMC) is widely expected to leave its benchmark interest rate at a targeted range between 0.25 and 0.50% for their fifth straight meeting. On Tuesday, the CME Group's (NASDAQ:NASDAQ:CME) Fed Watch tool placed the probability of a July rate hike at 2.4%.
Even if the FOMC holds rates steady, analysts will closely parse the monetary policy statement for signals on whether the Committee is leaning towards further tightening when it meets again in late-September. The odds of a September rate hike, according to the CME Group, rose to 25.2% on Tuesday, up from 18.8% a day earlier. By December, the odds rise substantially to 41.7%, in line with previous estimates over the last week.
The Nikkei 225 rose 1.39%, while the S&P/ASX 200 fell 0.05% after consumer prices data.
In Australia, CPI data for the second quarter showed a 0.4% rise quarter-on-quarter as expected, while the year-on-year figure came in at 1.0%, a bit below the 1.1% pace seen.
Still, underlying inflation year-on-year - the most important number for the market and the Reserve Bank - was slightly higher than expected at 1.5%.
So the outcome is mixed but still keeps alive the likelihood of a rate cut at the RBA's August board meeting. Much will depend on how the RBA views inflation pressures going ahead and to that extent still-soft housing related inflation, and soft non-tradable inflation may push them over the line for a cut.
The Shanghai Composite Index was last down 0.02% and Hong Kong's Hang Seng Index was last up 0.49%. The yuan was stronger against the dollar Wednesday after the People's Bank of China strengthened the fixing for a second consecutive day at 6.6671, compared with 6.6778 on Tuesday.
Overnight, U.S. stocks were mixed after the close on Tuesday, as gains in the Industrials, Basic Materials and Oil & Gas sectors led shares higher while losses in the Telecoms, Utilities and Consumer Goods sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average declined 0.10%, while the S&P 500 index gained 0.03%, and the NASDAQ Composite index climbed 0.24%.