SINGAPORE -- Oil and stock markets were under pressure on Wednesday, while the yen slightly extended its record losing streak as traders put Japan's ultra-easy monetary policy settings to the test.
The MSCI's broadest index of Asia-Pacific shares outside Japan was steady as modest losses in Hong Kong and Shanghai offset gains in Sydney. By mid morning, Japan's Nikkei had trimmed early gains to 0.5 percent higher.
The inflationary pressure from the disruption and the conflict in Ukraine are adding to markets expectation of an aggressive response from US monetary policymakers, which is driving the US Treasury yields higher and the yen lower.
The 10-year Treasury yield was within a whisker of 3 percent on Wednesday and inflation-protected yields were in positive territory for the first time since 2020.
Minneapolis Fed President Neel Kashkari said overnight that the Federal ReserveFederal Reserve will have to do more to bring inflation down.
The yen, which has tumbled at the same time as Japan vows to stick with ultra loose monetary policy and keep its bond yields near zero, wallowed at a two-decade low on Wednesday and fell on crosses.
There were some nerves that intervention from Japanese authorities could drive a bounce, but most traders still think that the path of least resistance is lower, despite the fact that it was 129.43 per dollar.
The US housing data seemed to add to investors expectation of US rate rises.
The euro is pinned in Ukraine and last bought $1.3025 because of the war in the currency markets.
After dropping 5 percent on Tuesday, crude futures were steady at $107.35 a barrel.