TOKYO — Asian shares were mixed in quiet trading Wednesday ahead of a U.S. Federal Reserve meeting that may give clues on what lies ahead with the central bank’s massive support for markets.
Japan’s Nikkei 225 NIK, -0.44% slipped nearly 0.3% in early trading to 29,359.31. South Korea’s Kospi 180721, +0.54% rose 0.4% to 3,272.11. Australia’s S&P/ASX 200 ASX10000, -7.37% gained 0.3% to 7,403.40. On Wall Street, the S&P 500 SPX, -0.20% dipped 0.2% to 4,246.59 as the Federal Reserve began a two-day meeting on interest-rates and other policies. A day earlier, the index hit an all-time high amid optimism about the economy.
The fear is that if higher inflation gets entrenched, the Fed may pull back on the $120 billion in monthly purchases of bonds it’s pledged to keep mortgages cheap and longer-term interest rates low, and might raise short-term interest rates off their record low. Most economists expect the Fed to say again on Wednesday that it sees higher inflation being only temporary, which would allow it to hold steady on its support for markets. But they also say Wednesday afternoon could offer the first sign that the Fed is mulling when to start slowing its purchases of bonds.
Other reports on the economy Tuesday painted a mixed picture. Retail sales fell 1.3% in May from April, slamming into reverse after a 0.9% gain the prior month, for a much steeper drop than economists expected.