European stock futures are pointing to a weak opening after Asian markets were dragged down by selling in Japan ahead of Friday’s central bank policy decision.
The dollar rose versus most of its major peers. Euro Stoxx 50 contracts slipped 0.3% as the Topix dropped for a third day on concern the Bank of Japan will cut back on bond purchases at its two-day meeting.
Other Asian markets performed better, with stocks gaining in Australia, Hong Kong and South Korea following a rally in their US peers Wednesday when cooling inflation offset a hawkish Federal Reserve policy decision.
US shares and Treasuries had rallied after a report showed the core consumer price index fell to the lowest in more than three years. Later, the Federal Reserve penciled in just one quarter point interest-rate cut this year, down from three seen in March.
“Given that there are clear signs that data is softening, markets will continue to expect the Fed to cut rates sooner, and that can support Asian markets,” said Charu Chanana, a strategist at Saxo Capital Markets. “The market is discounting the Fed’s cautious stance given it seems to come because of the dovish pivot earlier that proved premature.”
