The yen strengthened, recouping much of Tuesday’s losses, amid a largely directionless Asian session as traders debated the size of a potential Federal Reserve interest-rate cut.
Stocks were mixed. Japan’s currency climbed as much as 0.8% after sinking 1.3% in New York, helping to cause a whipsaw day for Japanese stocks. Market-implied odds are currently putting the chance of a half-point Fed rate cut Wednesday at just over 50%.
The central bank will also release new quarterly projections, and Chair Jerome Powell will hold a press conference. While most Asian stocks were lower, US equity futures ticked up after the S&P 500 Index touched a new record high Tuesday, and European futures were flat.
The dollar and Treasuries were both little changed. “There are more questions than answers on a 25- or 50-basis-point cut,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore. “It appears like a cautious day on the bench, by the sidelines, as the Fed is awaited.”
