Investing.com - Asian shares were mostly weaker on Wednesday as investors awaited what will most likely be the clearest signal on whether the Federal REserve will hike interest rates next month.
The Nikkei 225 fell 0.52%, while the Shanghai Composit was off 1.40%, building on Tuesday's sharp fall. The S&P/ASX 200 however gained 1.33%.
Japan's trade balance for July showed a deficit of ¥268 billion, wider than the ¥57 billion deficit seen. But exports made a surprise 7.6% gain in the month, year-on-year, compared to an expected 5.5% gain, while imports dropped 3.2%, less than the 7.9% fall seen.
Overnight, U.S. stocks were lower after the close on Tuesday, as losses in the Basic Materials, Technology and Oil & Gas sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average fell 0.19%, while the S&P 500 index declined 0.26%, and the NASDAQ Composite index lost 0.64%.
Investors are looking ahead to Wednesday’s minutes of the Federal Reserve’s July meeting, which it was hoped would provide more clarity on its plans to hike short-term interest rates for the first time since 2006.
Hours before the Fed minutes are made public on Wednesday afternoon, the U.S. Labor Department's Bureau of Labor Statistics will issue its Consumer Price Index (CPI) report for July. Last week, Fed vice chairman Stanley Fischer expressed concern with the lack of inflation in the U.S. economy due to slower than expected growth. The Fed would like to see long-term inflation move toward its targeted goal of 2% before it starts to raise interest rates.
For the July report, consensus forecasts expect the CPI to tick up 0.2% after solid monthly gains of 0.3% and 0.4% in June and May respectively. During its last monthly report, the CPI moved steadily upward in spite of record monthly declines in hospital services by 1.1%. The headline CPI also received a boost in June from a rise in energy prices, which increased by 1.7% for the month.
Energy prices, however, since late-June have crashed approximately 25% amid record oversupply on the global markets. The massive decline in crude prices has caused economists to temper their expectations for further gains in inflation. BNP Paribas (PARIS:PARIS:PARIS:PARIS:BNPP), for instance, has lowered its inflation forecast for January, 2016 to around 1.75% from above 2% in mid-June.