Asian equities wavered on Tuesday, ahead of the Federal Reserve's two-day monetary policy meeting and as European political uncertainty weighs on sentiment.
Market expectation for a U.S. rate hike is at 93.0 percent, according to CME Group's FedWatch Tool at 2:55 pm HK/SIN.
Ahead, traders will be cautious as they eye Federal Open Market Committee's upcoming decision and look for clues on how quickly the U.S. central bank is planning to tighten monetary policy.
"Solid U.S. employment growth of 235,000 in February, a fall in unemployment and a slight rise in wages growth keep the Fed on track to raise interest rates again this coming Wednesday," said Shane Oliver, head of investment strategy and chief economist at AMP Capital, in a weekly note.
"However, with U.S. monetary policy a long way from being tight, future rate hikes likely to be gradual and U.S. economic data likely to be solid we don't see it derailing the bull market in shares," Oliver said.
But aside from the Fed, European political uncertainty could also affect Asian equities by weighing on sentiment, Margaret Yang, market analyst at CMC Market said in a Tuesday note.
She cited the Dutch elections on Wednesday as a risk, as "Netherland's far-right Party for Freedom could emerge as one of the largest parties."
In addition, the possibility of U.K. Prime Minister Theresa May triggering Article 50 to formally begin the Brexit process and Scotland holding another independence referendum could also weigh on Asian markets and currencies.
The euro was trading at $1.0644 at 2:55 p.m. HK/SIN, weaker compared to levels around $1.05 seen last week, while the pound was also weaker against the greenback, at $1.2165.