SYDNEY - Asian share markets got off to a stuttering start on Wednesday following an uninspiring performance by Wall Street, while a dip in the dollar against the yen could prompt profit-taking on Japanese stocks into month-end.
Nikkei futures flagged a further modest pullback from the six-month peak touched on Monday. Conviction was also lacking elsewhere, with MSCI's broadest index of Asia-Pacific shares outside Japan 0.1 percent lower.
In truth there was no clear theme running through markets, except perhaps for a reluctance to get involved ahead of the US Thanksgiving holiday on Thursday and next week's payrolls report.
Wall Street had faded late on Tuesday after upbeat US data on home building and house prices were offset by a disappointing reading on consumer confidence.
The Dow Jones industrial average shed its early gains to end flat, while the S&P 500 Index eked out a 0.01 percent rise.
The Nasdaq managed to outperform thanks to gains in big-cap technology stocks and finished above 4,000 for the first time since the dot-com bubble burst in 2000.
Adding to the cautious mood was an escalation of political tensions in parts of Asia as the White House has called China's demands that airlines inform Beijing when flying over disputed islands in the East China Sea "unnecessarily inflammatory."
Two unarmed US B-52 bombers on a training mission flew over disputed islands in the East China Sea without informing Beijing, Pentagon officials said on Tuesday.
LOW FOR LONGER
In debt markets it was notable that investors continue to push out the date when the Federal Reserve might first raise official rates, proof the central bank has succeeded in divorcing tapering from tightening.
Eurodollar and Fed fund futures extended their three-month-old rally with many contracts reaching new highs. The market no longer has a first hike priced in until the very end of 2015, while before the Fed's September decision not to taper, it had been wagering on late 2014.
That sea change has in turn tempered the rise in longer-term rates with yields on 10-year Treasury paper slipping to 2.71 percent from a peak of 2.84 percent last week.
It might also be one reason the US dollar is struggling against some of its major counterparts. The euro bounced half a cent on Tuesday to reach $1.3575 and so test major chart resistance in the $1.3577/3589 zone.
The euro's gains came even as a who's who of officials at the European Central Bank opened the door to more policy easing including a negative deposit rate.
The dollar has also lost altitude against sterling and the Swiss franc over the last couple of weeks.
In contrast the dollar has fared much better against the yen, thanks in part to the Bank of Japan's continued commitment to its massive asset-buying campaign. On Wednesday, the dollar was holding at 101.26 yen just off the recent six-month peak around 101.91.
In commodities, US crude oil was pressured after industry group American Petroleum Institute (API) reported a 6.9 million barrel rise in crude oil inventories, far higher than the 600,000-barrel build anticipated by analysts.
Nymex crude eased 13 cents to $93.55 a barrel, leaving it not far from five-month lows.
Brent crude oil futures was steadier at $111.04 a barrel as investors concluded that a deal between Iran and world powers would bring no immediate increase in crude supplies