Asia stocks retreat slightly ahead of major central bank action, Nikkei 225 bucks the trend and posts a gain

  • Stocks are stepping back ahead of a midweek that sees plenty of central bank talking points.
  • Accelerating inflation still represents a major sticking point for equities, rate hikes in rapid succession could trigger another bear run.

Asia equities are mixed, but leaning towards the downside ahead of a grouping of central bank showings from the European Central Bank (ECB) and the US Fed regarding interest rates. Equities are retreating slightly ahead of the big meetings, but Japan's Nikkei index is remaining sunny and positive, trading towards the 23,000.00 level.

Signals of fresh strength in the US economy have been picking up, but overall market focus will be stuck to the Fed's projections looking forward, as well as looking for any signs of angst regarding a potential trade war with any number of the US' trade partners. A rate hike from the US Fed is pretty well priced in, and in a deja vu of just a month or so ago, traders will instead be screening for hints about an increased number of rate hikes this year.

Australia's ASX is down around -0.63%, with the Shanghai Composite and Hong Kong's Hang Seng down -0.75% and -0.62%. Japan's Nikkei 225 is still hanging onto positive notes for the day, up around 0.40% for Wednesday.

Nikkei 225 levels to watch

The Nikkei is trading towards the major 23,000.00 psychological handle, edging towards the last major high set in May (23,044.00), a level which would leave the index free to challenge the year's highs near 24,200.00. If bears resume taking control, then the Nikkei could easily slip backwards into the last swing low at 21,900.00.

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