TOKYO/NEW YORK:Asian stocks fell on Wednesday, tracking Wall Street, as investors waited to see if the U.S. Federal Reserve will signal a faster path toward policy normalisation than previously expected.

The U.S. central bank’s Federal Open Market Committee (FOMC) will end a two-day meeting later in the day.

An index of regional equities excluding Japan sank 0.3%, led by declines in South Korea’s Kospi and Australia’s S&P/ASX 200.

The Shanghai Composite index slid 0.4%, and Hong Kong’s Hang Seng fell 0.2%.

Japan’s Nikkei 225 bucked the trend to add 0.1%, but the broader Topix index was flat to slightly lower.

Global markets have been swung in recent weeks by a rout in Treasuries that saw the benchmark yield soar to a more than one-year high as bond investors bet that accelerating COVID-19 vaccinations and massive fiscal stimulus would spur faster-than-expected growth and inflation in the world’s biggest economy.

The volatility stoked speculation the Fed may be forced into a technical adjustment to the levers controlling its policy rate, but few expect the central bank to act on the matter at this week’s meeting, even if it releases rosier growth forecasts.

“We expect (Chair Jerome) Powell to note the FOMC has the tools to intervene if the bond market becomes disorderly or constrains the economic recovery,” analysts of Commonwealth Bank of Australia wrote.

“But we expect Powell to push back against talk of policy tightening because of the large amount of labour market slack.”

“U.S. bond yields and the USD could jump if the FOMC’s post‑meeting statement and Powell’s statement are not deemed dovish enough.”

Benchmark 10-year Treasury yields continued to consolidate around 1.6%, standing at 1.6197% on Wednesday in Asia. They reached 1.6420% on Friday for the first time since February of last year.

An index tracking the dollar against six major peers held at around 91.90 following its retreat from a three-month high of 92.506, touched last week.

Currency market caution may extend all week, with the Bank of England announcing its policy decision on Thursday, and the Bank of Japan wrapping up a policy review on Friday in which it may phase out a numerical target for its asset buying.

On Tuesday, the Dow Jones Industrial Average fell 0.39% to end at 32,825.95 points, while the S&P 500 lost 0.16% to 3,962.71. The Nasdaq Composite edged up 0.09% to 13,471.57.

E-mini futures for the S&P 500 slipped 0.04% on Wednesday.

Gold prices edged up to hover at their highest in more than two weeks on prospects of higher inflation.

Spot gold was up about 0.2% at $1,734.81 per ounce.

Oil prices were lower amid concerns over demand after Germany, France and other European countries suspended use of AstraZeneca’s vaccine, a move which could curb the strength of the region’s economic recovery.

Brent crude futures slid 12 cents to $68.27 a barrel and U.S. crude futures slipped 3 cents to $64.77 a barrel.