In This Article:
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Asian stock markets: https://tmsnrt.rs/2zpUAr4
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Most Asia indices ease, S&P 500 futures flat
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Markets await Powell's take on U.S. rate outlook
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UK CPI data to swing betting on BoE rate hike
By Wayne Cole
SYDNEY, June 21 (Reuters) - Asian stocks struggled on Wednesday as a lack of new stimulus steps from Beijing frustrated investors, who were also wondering just how hawkish the world's most powerful central banker would be later in the session.
Federal Reserve Chair Jerome Powell faces lawmakers in two days of testimony and is sure to be questioned on whether rates will really rise again in July and peak in a 5.5%-5.75% range as projected.
Markets have their doubts and currently imply around a 78% chance of a hike to 5.25-5.5% next month, with that likely being the end of the entire tightening cycle.
"The focus is on whether the July meeting is truly "live" and if the Fed dot plot of two more hikes is a true base case depending on the data, or doom-mongering on inflation in an effort to ensure no premature easing in financial conditions," said Tapas Strickland, head of market economics at NAB.
The uncertainty kept S&P 500 futures and Nasdaq futures flat after a slight dip overnight. EUROSTOXX 50 futures edged up 0.2% and FTSE futures 0.1%.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.8%, with South Korea off 0.6%.
Japan's Nikkei added 0.7% as the market consolidates three months of hefty gains. A survey showed morale at big Japanese manufacturers firmed in June to stay in positive territory for a second straight month.
Chinese blue chips eased 0.6% with investors still disappointed by the extent of Tuesday's rate cuts, which also saw the yuan hit its lowest for the year.
BOJ IN NO HURRY
Elsewhere in currencies, the battered Japanese yen won some respite as risk aversion prompted profit-taking on very crowded short positions. The currency has been falling for weeks as the Bank of Japan (BOJ) doggedly defended its super easy policies.
Minutes of the central bank's last meeting showed just one of nine board members suggested reconsidering its policy of keeping bond yields low, and even then suggested it was best to wait a while.
That lack of urgency should limit any bounce in the yen and kept the dollar underpinned at 141.80 yen, only just off Tuesday's seven-month high of 142.26.
The euro, likewise, steadied at 154.78 yen, not far from its recent peak of 155.37. The single currency was flat on the dollar at $1.0916, as was sterling at $1.2765 .
The pound faces a major test from data on UK consumer prices later in the day, where any upside surprise would add to pressure for the Bank of England (BoE) to hike by an outsized 50 basis points at its policy meeting on Thursday.