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Equities fluctuated Wednesday ahead of a crunch US inflation report, with investors increasingly nervous that a recent spike in oil will put fresh upward pressure on consumer prices and force the Federal Reserve to lift interest rates again.
The central bank has insisted that its decision-making on monetary policy will be data-driven as it assesses a range of figures, which have for much of 2023 suggested that more than a year of tightening is having the desired effect.
That had fanned optimism that July's hike was the last and officials would allow its measures to work through the economy and bring inflation to heel.
But a recent run of strong data, particularly on the jobs market and the services sector, has revived talk that more were on the way, with a surge in oil prices to 10-month highs adding to those concerns.
The pick-up has been fuelled by Saudi Arabia and Russia's decision to slash output until the end of the year, while floods in Libya have hammered its ability to pump.
"Global markets are feeling the heat from higher oil prices and their inflationary implications, as the recent price upswing carries inherent risks to the Fed's inflation and interest rate outlook," said Stephen Innes at SPI Asset Management.
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"While the current surge might not tip the scales to a September hike, oil prices at (more than) $90 per barrel do fit the Fed criteria that would justify another rate increase in either November or December."
He added that crude's advance could spark a "substantial uptick in headline inflation, which may compel the Federal Reserve to adopt a more assertive approach than what investors are currently prepared for".
The US consumer price index reading on Wednesday will be followed Thursday by the producer price index, with the Fed's policy meeting next week.
Asian equity markets struggled to maintain direction in the morning session, swinging in and out of positive territory.
Hong Kong edged up after five days of losses, while Shanghai, Taipei and Jakarta were also in the green.
Tokyo, Sydney, Singapore, Seoul, Wellington and Manila dipped.
The tepid performance came after an uninspiring lead from Wall Street, where tech giants including Apple, Amazon and Google parent Alphabet sank.
Traders are also keeping an eye on Japan after the yen's recent rally this week faded and it returned to 10-month lows against the dollar owing to rising expectations of another Fed hike.
That has come even as expectations grow that Japan's central bank is preparing to at some point move away from its ultra-loose monetary policy.
Key figures around 0230 GMT
Tokyo - Nikkei 225: DOWN 0.3 percent at 32,675.89 (break)
Hong Kong - Hang Seng Index: UP 0.2 percent at 18,058.18
Shanghai - Composite: UP 0.1 percent at 3,139.37
Dollar/yen: UP at 147.35 yen from 147.15 yen on Tuesday
Euro/dollar: UP at $1.0754 from $1.0732
Pound/dollar: DOWN at $1.2488 from $1.2492
Euro/pound: UP at 86.11 from 85.88 pence
West Texas Intermediate: UP 0.2 percent at $89.05 per barrel
Brent North Sea crude: UP 0.2 percent at $92.20 per barrel
New York - Dow: DOWN 0.1 percent at 34,645.99 (close)
London - FTSE 100: UP 0.4 percent at 7,527.53 (close)