ASIAN markets mostly dipped today, following a downbeat lead from Wall Street as investors braced for Fed boss Jerome Powell’s testimony to the US Congress.

The retreat extended a subdued start to the week, with investors unimpressed by China’s efforts to boost its economy, including a fresh interest rate cut that was smaller than expected.

All three major US indices as well as the top European markets closed in the red yesterday, and Asian investors picked up the baton in a similar mood.

Hong Kong, Shanghai, Sydney, Wellington and Seoul all dropped in morning trade. Tokyo also fell at the open but clawed back into positive territory.

All eyes are on Washington, where Fed Chair Powell will make a semiannual appearance before Congress.

His comments will be closely scrutinised for clues about the direction of the Fed’s campaign to fight soaring inflation with interest rate hikes.

“He will come on and try to remain hawkish,” ANZ Bank’s Mahjabeen Zaman told Bloomberg Television, saying there was still a risk of further hikes.

The US central bank last week held rates steady after 10 straight increases, but signalled more hikes to bring prices under control.

The anxiety over Powell’s testimony built on top of disappointment on market floors this week with Beijing’s moves to try and revive the Chinese economy.

The People’s Bank of China reduced its benchmark five-year rate by 10 basis points yesterday, less than the 15 points expected, though it did meet forecasts for a 15-point reduction in the one-year rate.

“Developments in China, where the central bank cut its reference interest rate by 10 basis points, continue to point to a slower-than-predicted post-pandemic recovery in the world’s second-largest economy,” said ActivTrades analyst Ricardo Evangelista.

“With China’s economy struggling to regain momentum, the headwinds for the global economy get stronger.”

CMC Markets analyst Michael Hewson said the consensus was that the PBOC’s “measure won’t make much difference” and that it is just “tinkering around the edges”.

Key figures around 2.45am:

Tokyo - Nikkei 225: UP 0.4% at 33,523.53

Hong Kong - Hang Seng Index: DOWN 1.6% at 19,296.96

Shanghai - Composite: DOWN 0.1% at 3,236.00

Euro/dollar: DOWN at US$1.0917 from US$1.0918 at 8.20pm yesterday

Pound/dollar: DOWN at US$1.2763 from US$1.2766

Dollar/yen: UP at ¥141.61 from ¥141.40 

Euro/pound: UP at 85.53 pence from 85.50 pence

West Texas Intermediate: UP 0.4% at US$71.46 per barrel

Brent North Sea crude: UP 0.3% at US$76.14 per barrel

New York - Dow: DOWN 0.7% at 34,053.87 (close)

London - FTSE 100: DOWN 0.3% at 7,569.31 (close). – AFP, June 21, 2023.

* Bloomberg News contributed to this story.