Asia stocks slip, dollar up as policymakers give mixed signals on rate cuts

Asian stocks slipped on Wednesday, while the dollar climbed despite lower US Treasury yields as markets assessed mixed signals from US policymakers and economic data on the path for Federal Reserve interest rates.
 

The yen sank even with the threat of currency intervention from Japanese authorities to support it.
 

Crude oil wallowed near two-month lows amid signs of easing supply pressure and continued hopes for a Middle East ceasefire.
 

MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.4 per cent, with mainland Chinese blue chips and Hong Kong's Hang Seng each down about 0.6 per cent.
 

Japan's Nikkei slumped about 1.4 per cent as traders took profits following the previous session's 1.6 per cent surge. The tech-heavy index also succumbed to pressure from a sell-off in US chip stocks on Tuesday.
 

US stock futures were flat, while German DAX futures lost 0.1 per cent and Britain's FTSE futures added 0.15 per cent.
 

The yen dropped 0.34 per cent to 155.215 per dollar, even as Japan's Finance Minister Shunichi Suzuki expressed deep concern over the negative impact of a weak currency and reiterated a readiness to respond to excessive volatility.
 

The US dollar index - which measures the currency against the yen, euro, sterling and three other major peers - rose 0.14 per cent to 105.57, adding to Tuesday's 0.3 per cent advance.
 

The euro edged down 0.12 per cent to $1.07325 and sterling lost 0.18 per cent to $1.24865.

On Tuesday, Minneapolis Fed President Neel Kashkari suggested the US central bank may need to forgo interest rate cuts this year due to stubborn inflation.
 

Last week, Fed Chair Jerome Powell said the wait to loosen policy is taking longer than anticipated, but signalled his inclination is still to cut.
 

And while prices have been sticky, the labour market showed some signs of weakening in the monthly payrolls data from Friday. The next major data point will be consumer prices in a week from now.
 

"Debate continues within markets and amongst policymakers about the appropriate level for interest rates," Kyle Rodda, senior financial markets analyst at Capital.com, wrote in a report.
 

"A lack of major US economic data in the days ahead (means) there was little to position for or react to," he added.

"For now, the markets see marginally higher chances for two cuts in the US this year, with the first fully baked in for November."
 

US long-term Treasury yields stood at 4.47 per cent in Asian trading, after dipping to a nearly one-month low of 4.42 per cent on Tuesday.
 

Gold slipped 0.25 per cent to around $2,319.50 per ounce.
 

Crude oil extended Tuesday's declines after market sources said that data due later from the American Petroleum Institute will show a jump in US crude and fuel stocks for last week, a sign of lower demand.
 

Meanwhile, the US believes negotiations on a Gaza ceasefire should be able to close the gaps between Israel and Hamas, lessening the risks of supply disruptions.
 

Brent crude oil futures fell 46 cents, or 0.55 per cent, to $82.70 a barrel. US West Texas Intermediate crude futures slid 41 cents, or 0.52 per cent, to $77.97 a barrel.

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