TV crews talk in front of a large screen showing stock prices at the Tokyo Stock Exchange in Tokyo.
SINGAPORE Reuters -- Asian stocks struggled to come off two-month lows on Wednesday, and the safe-haven dollar was firm as concerns about rising interest rates and slowing global growth kept the mood downbeat while markets waited for economic data to chart the course ahead.
MSCI's broadest index of Asia-Pacific shares outside Japan touched its lowest since January at 509.4, before falling to a flat at 511.46. Japan's futures Nikkei and S&P 500 fell by 0.5%.
In Australia, the Aussie dollar fell to a two-month trough at $0.6696 early in the day, but lifted the local stock market from lows as traders turned back interest rate expectations.
The Aussie is down almost 6% from an eight month high it made in early February. The U.S. dollar was broadly unchanged in February, although it gained on most majors through February. With stocks have handed back January gains in February, while bonds fell on renewed worry about rising rates, traders are looking for the next flush of economic indicators to gauge the outlook.
China's manufacturing data came in stronger than expected, lending a little support to the Chinese yuan. The U.S. ISM PMI figures are due later in the day.
ANZ Bank analysts said that the upcoming data cycle and anticipated forecast revisions by central banks will be critical in forming the next leg of financial market trading.
The mixed tone of data appears to have a lot of assets pausing at major chart levels.
Inflation readings in Europe drove bond selling, before weaker than expected U.S. confidence figures offered a glimmer of hope that rate hikes are biting and are perhaps within striking distance of peaking.
Two-year Treasury yields, a guide to short-term U.S. rate expectations, are close to four-month highs, but at 4.8407% are below a November peak of 4.8830%. In Asia, the 10-year yields of Benchmark 10 rose three basis points to 3.9454%.
Besides the Aussie's drop, moves were fairly muted. The euro was at $1.0556 and the yen went down a bit to 136.46 to the dollar. As China hopes to balance global growth concerns, FRX Commodities steadied, and Brent crude sat at $83.45 a barrel.
Grains have slid after rains in parts of the U.S. winter wheat belt and optimism over a Russia-Ukraine export deal drove investors to close long positions. GRA Geopolitics keeps their investors on their toes. U.S. President Joe Biden visited Kyiv and Russian President Vladimir Putin's departure from the last remaining nuclear arms control treaty with the U.S. signaled a hardening of positions.
China, which signalled support for Russia by sending its top diplomat to Moscow last week, has issued a call for peace, although Washington has said in recent days it worries that China could send arms to Russia.
If Beijing sends Russia arms, it risks a rapid geopolitical breakup of the world economy, said Jan Lambregts, research head at Rabobank. Markets have not even begun to contemplate what this might mean.