Asian shares mixed as investors await central bank moves

TOKYO (AP) — Asian shares were mixed Tuesday amid cautious trading ahead of a policy meeting by the U.S. Federal Reserve.

Japan's benchmark Nikkei 225 lost 0.4% to finish at 29,520.90. Australia's S&P/ASX 200 slipped 0.6% to 7,324.30. South Korea's Kospi surged 1.1% to 3,012.63. Hong Kong's Hang Seng fell 0.1% to 25,124.94, while the Shanghai Composite shed 1.2% to 3,502.60.

With inflation in the U.S. at its highest point in three decades, the U.S. Federal Reserve is set this week to begin winding down the extraordinary stimulus it has given the economy since the pandemic recession struck early last year, a process that could prove a risky balancing act.

Chair Jerome Powell has signaled the Fed will announce after its policy meeting Wednesday that it will start paring its $120 billion in monthly bond purchases as soon as this month. Those purchases are intended to keep long-term loan rates low to encourage borrowing and spending.

Investors were also watching for action from the Reserve Bank of Australia, which kept its key interest change unchanged at a record low 0.1% but indicated it was preparing to cut back some of its economic support measures.

“While the record highs in Wall Street overnight may lift sentiments for Asia markets, the upcoming central banks’ decisions may put some risk sentiments on hold,” said Yeap Jun Rong, a market strategist at IG.

U.S. stocks closed with modest gains on Wall Street, extending the major indexes' recent record-setting run. The S&P 500 rose 0.2% to 4,613.67 after spending much of the day wavering between small gains and losses. The Dow Jones Industrial Average added 0.3% to 35,913.64 and the Nasdaq rose 0.6% to 15,595.92. The gains pushed the three indexes above the all-time highs they set on Friday.

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