Asian stocks were subdued on Wednesday after lacklustre earnings from US tech behemoths Tesla and Alphabet dented sentiment, while the yen hit a six-week high ahead of a central bank meeting next week where a rate hike remains on the table.

The US dollar was broadly firm, with traders watching out for an inflation reading on Friday and Federal Reserve meeting next week. The Bank of Japan is also due to meet next week, where a 10 basis point hike is priced at a 44% chance.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), was 0.08% lower at 566.26, not far from the one-month low of 562.43 it touched on Monday.

Japan’s Nikkei (.N225), fell 0.23% while Taiwan financial markets are closed due to a typhoon.

Nasdaq futures fell 0.5%, while S&P 500 futures eased 0.36% after Tesla (TSLA.O), reported its smallest profit margin in more than five years. Shares of Google-parent Alphabet (GOOGL.O), slipped in after-hours trade even after the firm beat revenue and profit targets.

“The bar was set so high for Alphabet that a modest earnings beat couldn’t push the stock higher. So, the market has no news to buy into,” said Kyle Rodda, senior financial market analyst at Capital.com.

“It also speaks to concerns that tech stocks are too richly valued here. We will have to see how the other tech giants report and how the markets react.”

Chinese stocks were lower in choppy trading, with the Shanghai Composite index (.SSEC), opens new tab down 0.18%, while the blue-chip CSI300 index (.CSI300), opens new tab was 0.19% lower after recording its largest one-day decline since mid-January on Tuesday.

Investor sentiment remained fragile in the world’s second-biggest economy despite stimulation efforts.

On the macro side, investors await the US GDP data on Thursday and PCE data – the Fed’s favoured measure of inflation – on Friday to gauge the expectations of interest rate cuts this year.
Markets are pricing in 62 basis points of easing this year, with a cut in September priced in at 95%, the CME FedWatch tool showed.

A growing majority of economists in a Reuters poll said the Fed will likely cut rates just twice this year, in September and December, as resilient US consumer demand warrants a cautious approach despite easing inflation.

“The US consumer has remained extremely strong … but you’re starting to see a degree of fragility underlying some of the data,” said Luke Browne, head of asset allocation for Asia at Manulife Investment Management.

“We are expecting probably two cuts from the Fed now, there is of course a high degree of uncertainty. We watch closely the data as it evolves and whilst inflation has been easing somewhat, there remain pressures underlying that.”

Yen ride

The Japanese yen rose to touch 155.25 per dollar in Asian hours, its highest since June 7 after surging nearly 1% on Tuesday, having languished near a 38-year low of 161.96 at the start of the month.

Traders suspect Tokyo intervened in the currency market in early July to yank the yen away from those lows, with estimates from BOJ data indicating authorities may have spent roughly 6 trillion yen ($38.62 billion) to prop up the frail currency.

The bouts of intervention have led speculators to unwound popular and profitable carry trades, in which traders borrow the yen at low rates to invest in dollar-priced assets for a higher return.

The yen was broadly higher, with the Japanese unit touching a one-month high against the pound , the euro and a two-month high against the Australian dollar

The dollar index , which measures the US currency against six rivals, was little changed at 104.47. The index is down 1.3% this month.

Investor focus on Wednesday will also be on purchasing managers’ index figures across the globe to gauge the health of economies.

In commodities, oil prices rose on falling US crude inventories. Brent crude futures for September rose 0.25% to $81.21 a barrel, while US West Texas Intermediate crude for September gained 0.26% to $77.16 per barrel.