There is a concern that upbeat earnings, progress on trade and signs of resilience in economy could keep US Fed from further measures.
Hong Kong: Asian markets slipped Wednesday as traders play a wait-and-see game ahead of the Federal Reserve's latest policy decision, with expectations for another interest rate cut but focus also on its plans for the future.
Expectations for another drop in borrowing costs, along with optimism over the China-US trade talks and healthy corporate reports have provided much-needed support to equities of late after a volatile year.
However, while the general consensus is for a third reduction this year, there is a concern that the upbeat earnings, progress on trade and signs of resilience in the US economy could keep the central bank from further measures.
This makes Fed boss Jerome Powell's post-meeting statement crucial, with dealers poring over his every word.
"I don't think we should fear a hawkish cut, but I do think one of the things to keep in mind, relative to the prior cut periods, is the Fed starting from a much lower rate so there is a lot less room for the Fed to continue to cut," Carol Schleif, at Abbot Downing Investment Advisors, told Bloomberg TV.
In early trade most markets were down, with investors having already factored in a cut.
Hong Kong and Shanghai were each down 0.3 per cent, Sydney dropped 0.7 per cent and Tokyo went into the break 0.4 per cent lower.
Seoul, Taipei, Jakarta and Manila were also weaker though Singapore and Wellington edged up.
Sterling was flat but supported by relief that Britain is unlikely to leave the European Union without a deal after the bloc's leaders granted a three-month extension to the deadline and MPs voted for a general election in December.
Boris Johnson finally got his snap poll after the opposition Labour Party said it was satisfied a no-deal divorce was now off the table.
The prime minister is optimistic his Conservatives will get a clear majority in the vote -- tipped to be December 12 -- that will allow him to push his Brexit agreement through parliament and drag the country out of the EU after years of deadlock.
A Conservative "majority is arguably the most sterling-positive outcome, initially at least, in so far as it means the government withdrawal bill can then be passed and the UK 'Brexits' no later than January 31, with a transition deal lasting through end-2020," said National Australia Bank analyst Ray Attrill.
But he added that "there will remain a high degree of uncertainty over what a post-Brexit UK-EU trading relationship will look like come 2021".
However, while Johnson is well ahead in opinion polls there were warnings that there could still be an upset, similar to 2017 when then-PM Theresa May's gamble backfired and left the country with a hung parliament.
Another such result would reignite the chances of a no-deal and hammer the pound.
"The market seems to be making assumptions about the outcome of the UK general election," said AxiTrader's Stephen Innes. "Indeed, all the polls point to a solid victory for Boris Johnson, but we have been down this road before, and history should remind us that when it comes to UK elections, strange things can happen."