Asia-Pacific markets set to trade cautiously as investors worry about inflation

• Futures contracts tied to Japan's Nikkei 225 and Australia's benchmark ASX 200 pointed to opening losses.
• Wednesday's session follows overnight sell-off stateside where the Dow Jones Industrial Average experienced its worst day since February.
• In the currency market, the U.S. dollar last traded at 90.141, declining from levels near and above 91.00 in the previous week.

SINGAPORE — Asia-Pacific markets were set to trade cautiously on Wednesday, following sharp sell-offs in some markets in the previous session.

Futures contracts tied to Japan's Nikkei 225 and Australia's benchmark ASX 200 pointed to opening losses.

"The tech led equity rout that began on Monday's US trading session extended into our APAC region yesterday and overnight Europe joint the retreat with some heavy losses," Rodrigo Catril, a senior foreign-exchange strategist at the National Australia Bank, wrote in a morning note.

"Inflation concerns against a backdrop of higher commodity prices was identified as the reason for the US technology led equity sell-off on Monday night," he said. "That said looking at the data releases over the past 24 hours, one could argue that we had at least one more new evidence that inflation is on the rise."

China released data on Tuesday that showed factory gate prices rose at the fastest rate in three and a half years in April while consumer prices rose at a more modest pace. That fueled some of the concerns around a rapid rise in inflation that may force central banks to raise interest rates and implement other tightening measures.

Wednesday's session follows overnight sell-off stateside where the Dow Jones Industrial Average experienced its worst day since February.

Currencies and oil

In the currency market, the U.S. dollar last traded at 90.141, declining from levels near and above 91.00 in the previous week.

The Japanese yen changed hands at 108.65 per dollar, strengthening from last week's levels above 109.00. Meanwhile, the Australian dollar traded near flat at $0.7838.

Oil prices traded higher on Wednesday during Asian trading hours. U.S. crude futures rose 0.29% to $65.47 a barrel.

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