Asian stocks advanced on Tuesday but failed to surpass this month's peak due to conflicting statements from U.S. Federal Reserve officials, casting uncertainty on the timing of potential interest rate adjustments.
Concerns about Japan intervening to stabilize the yen slightly pressured the dollar, although it strengthened against the yuan amid speculation that China might tolerate a weaker currency.
The MSCI's broadest index of Asia-Pacific shares outside Japan climbed by 0.6%, with South Korean chipmakers SK Hynix and Samsung Electronics leading gains, pushing the Kospi up by 1.2%.
Japan's Nikkei remained steady, while the yen traded at 151.31 per dollar.
Chicago Fed President Austan Goolsbee suggested three rate cuts this year, while Fed Governor Lisa Cook urged caution and Atlanta Fed President Raphael Bostic scaled back expectations to one cut, adding uncertainty to the policy outlook.
The differing views among FOMC participants complicate the policy outlook as markets await U.S. inflation data, scheduled for release on Good Friday when many markets will be closed.
Standard Chartered strategist Steve Englander noted that some FOMC voters see zero, one, or two cuts this year, while Chair Jerome Powell likely aims to garner more support for easing in the coming months.
Interest rate futures imply around three Fed rate cuts this year, with a three-in-four chance of the first cut in June.
U.S. two-year yields, indicative of short-term interest rate expectations, initially rose but later fell in Asian trading.
S&P 500 futures edged up 0.1%, while the cash index closed 0.3% lower overnight.
In currency markets, remarks from Japan's top currency official, Masato Kanda, stabilized the yen amid speculation about Japan's intervention.
The Bank of Japan recently raised interest rates, yet the yen remains near three-decade lows against the dollar.
China's yuan started steady after a stronger-than-anticipated trading band fix, but selling pressure drove it below its 200-day moving average against the dollar.
Concerns arose following a sharp yuan decline on Friday, prompting speculation that China might be allowing the currency to weaken.
BofA Securities' strategist Adarsh Sinha suggested that accommodative monetary policy might be necessary amid growth challenges if the yuan depreciation continues.
Later on Tuesday, the Reserve Bank of New Zealand's chief economist is scheduled to speak, while U.S. manufacturing, services, and consumer confidence data are awaited. U.S. core PCE data is due on Friday.
Gold and oil prices remained stable, with spot gold at $2,169 per ounce and Brent crude futures rising by 24 cents to $86.99 per barrel.
Bitcoin traded just above $70,000 after a sharp increase on Monday.
Paraphrasing text from "Investing" all rights reserved by the original author.
