Dollar rises, Asian equities decline as the Fed considers its rate path

Wednesday's losses in Asian equities coincided with a rise in the dollar despite falling US Treasury yields as investors evaluated conflicting signals from US politicians and economic data over the direction of Fed interest rates.

Even with the danger of Japanese officials intervening in currency markets to boost the yen, the yen fell.

Amid persistent expectations for a Middle East truce and signs of relieving supply pressure, crude oil sank to nearly two-month lows.

After rising 1.6% the previous day, traders collected gains, and Japan's Nikkei fell by almost 1.4%. The sell-off in U.S. semiconductor companies on Tuesday put further pressure on the tech-heavy index.

Neel Kashkari, the president of the Minneapolis Fed, said on Tuesday that the United States central bank could have to postpone interest rate reductions this year owing to persistent inflation.

Fed Chair Jerome Powell said last week that he is still inclined to drop rates even if he acknowledged it is taking longer than expected to ease policy.

Furthermore, although prices have remained stable, Friday's monthly payroll figures indicated some symptoms of weakness in the labour market. In one week, consumer prices will be the next significant data point.

After market sources predicted that data from the American Petroleum Institute, which is scheduled later, will show a surge in U.S. crude and fuel stockpiles for last week, an indication of reduced demand, crude oil continued its losses on Tuesday.

In the meanwhile, the United States thinks that talks on a truce in Gaza ought to be able to reduce the distance between Israel and Hamas, lowering the likelihood of supply interruptions.

(Sources: investing.com, reuters.com)