Asian shares drop ahead of Fed minutes

Asian stocks are on the defensive on renewed recession fears ahead of the minutes of the July Federal Open Market Committee (FOMC).

MSCI’s broadest index of Asia-Pacific shares outside Japan is down 0.2%, having scored gains for the third straight day on Tuesday, according to Reuters.

At press time, Japan’s Nikkei is down 0.40% and Hong Kong's Hang Seng is shedding 0.13%. The Shanghai Composite is trading largely unchanged on the day, while the shares in South Korea are reporting moderate gains. Australia's S&P/ASX 200 is currently reporting a 1% drop.

On Tuesday, the Dow Jones Industrial Average and the Nasdaq fell 0.7% each while the S&P 500 lost 0.8%.

Trump said on Tuesday he would confront China over trade even if it causes short-term harm to the U.S. economy because Beijing has cheated Washington for decades.

Further, reports hit the wires earlier today that Trump's administration is preparing for a small election year recession.

Focus on Fed minutes

The probability of a rate cut in September would increase if the Federal Reserve (Fed) minutes, scheduled for release at 18:00 GMT, reflect the market’s rising global concerns.

The equities will likely pick up a bid if the Fed minutes sound dovish.

The central bank cut rates by 25 basis points on July 31, but Chairman Powell refrained from signaling additional easing. However, in the last three weeks, the risk in the global markets has increased substantially due to escalation of the US-China trade war, slide in China's Yuan and German recession fears.