Asian shares drifted lower on Wednesday as investors waited for more clues on the state of the US economy, after hopes for further stimulus from the US Federal Reserve strengthened risk appetite and lifted prices the previous session.
The MSCI's broadest index of Asia Pacific shares outside Japan was down 0.1%, after rising more than 1% to a one-week high on Tuesday. Global stocks were little changed while US stocks retreated from near four-year peaks and closed near their session lows on Tuesday.
Japan's Nikkei share average opened down 1%, reversing from a 2.4% jump on Tuesday to its highest level since last year's massive earthquake and tsunami on March 11.
Fed Chairman Ben Bernanke said on Tuesday it was too soon to declare victory in the US economic recovery, warning against complacency in policymaking as the outlook brightens.
After saying on Monday that accommodative monetary policy would stay in place to support demand and drive down long-term unemployment, Bernanke told ABC news on Tuesday that the Fed has not taken any options off the table and needs to be prepared to respond to however the US economy evolves.
The Federal Reserve remains unlikely to abandon QE3 outright, said Ashraf Laidi, chief global strategist at City Index Group, adding that this would be bullish for the euro against the dollar.
"A form of restricted QE remains the most likely outcome, especially as inflationary pressures risk being more than just transitory," he said.
After falling on Bernanke's comments, the dollar climbed against the euro on Tuesday to snap two straight sessions of losses. The US currency was last down 0.1% against the single currency at $1.3329.
Expectations for a steady recovery in the US economy have underpinned investor sentiment, offsetting the negative mood stirred by deteriorating euro zone growth.
Investors will be looking for clues from US durable goods orders data for February, due later in the day.
Data on Tuesday showed Americans were more worried about inflation in March than at any time in the last 10 months and consumer confidence waned in the wake of higher gasoline prices.
But the data suggested US consumers did not feel the economic recovery was losing momentum, and their view of their present situation rose to the highest level since September 2008. Another report showed US home prices were unchanged in January from December, hinting at a stabilising housing market.
Brent crude prices dipped on Tuesday to settle at $125.54 a barrel in tug-of-war trading, as market players factored concerns over supply disruptions against the likelihood of a release of US strategic oil reserves to cap rising fuel costs.
US crude was down 0.4% at $106.88 a barrel on Wednesday after settling up 30 cents at $107.33 a barrel.
Asian credit markets were a touch softer, with the spread on the iTraxx Asia ex-Japan investment-grade index widening by a couple of basis points early on Wednesday.