Australian and Japanese markets experienced declines on Wednesday as investors prepared for the upcoming rate decision from the U.S. Federal Reserve, scheduled for early Thursday in Asia.
Investor attention also remained focused on the yen, which witnessed volatility at the beginning of the week due to suspected intervention on Monday. Currently, the currency is trading around the 157.7 level against the U.S. dollar.
With most Asian markets closed on Wednesday for the Labor Day holiday, Japan’s Nikkei 225 edged down 0.34%, reversing earlier losses to close at 38,274.05, while the broader Topix index dipped 0.5% to end at 2,729.4.
The Australian S&P/ASX 200 retreated 1.23%, concluding at 7,569.9.
Overnight in the U.S., all three major indexes declined following higher-than-expected wage data, which heightened inflation concerns ahead of the Federal Reserve’s rate decision.
According to the Labor Department’s report on Tuesday, the employment cost index, a gauge of wages and benefits, increased by 1.2% in the first quarter, surpassing the 1% consensus estimate from economists polled by Dow Jones.
Treasury yields surged after the release of the data, with the 2-year yield exceeding 5%. The S&P 500 fell by 1.57%, the Dow Jones Industrial Average dropped 1.49%, and the Nasdaq Composite shed 2.04% to close at 15,657.82.
