Asia-Pacific markets set to open lower ahead of Australia's CPI report

SINGAPORE — Futures in the Asia-Pacific pointed to a lower open on Wednesday ahead of Australia's inflation report and with investors looking forward to the Fed's policy decision.

The Nikkei futures contract in Chicago was at 27,575 while its counterpart in Osaka was at 27,450. That compared against the Nikkei 225's last close at 27,655.21.

SPI futures in Australia were at 6,675, lower than the S&P/ASX 200's last close at 6,807.3.

Australia's inflation data is due Wednesday, and is expected to reach 6.2% for the second quarter, up from 5.1% in the first quarter.

ANZ Research in a Wednesday note said it sees headline inflation accelerating to 6.6% from a year ago.

"We think the risks are more balanced for these stronger forecasts given ongoing upside inflation surprises globally," the note said. CPI in the U.S. and U.K. both came in above expectations this month.

Kristina Clifton, an economist at Commonwealth Bank of Australia, wrote in a note that the CPI reading Down Under could influence the market's expectations for future rate hikes.

"We expect that any impacts on the AUD from today's CPI will be short lived because the darkening global outlook will be a greater weight on AUD," she wrote.

The International Monetary Fund on Tuesday cut its global GDP forecasts for 2022 and 2023. It now expects growth to come in at 3.2% this year, 0.4 percentage points lower than its April projection.

The Australian dollar stood at $0.6949 in early Asia trade.

U.S. stocks slipped overnight after Walmart cut its earnings forecast.

The Dow Jones Industrial Average slipped 228.50 points, or 0.71%, to 31,761.54. The S&P 500 dipped by 1.15% to 3,921.05, while the Nasdaq Composite fell around 1.87% to 11,562.57. 

The Federal Open Market Committee began its meeting on Tuesday stateside and will continue on Wednesday.

Expectations for a 75 basis point move were at 75.1%, according to the CME Group's FedWatch Tool.

In corporate news, automaker Mitsubishi Motors, miner Rio Tinto and chipmaker SK Hynix will be reporting earnings.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 107.183, higher than Tuesday's levels.

The Japanese yen traded at 136.91 per dollar, weaker compared to last week's levels.

— CNBC's Tanaya Macheel, Sarah Min and Karen Gilchrist contributed to this report.