A man walks past the Tokyo Stock Exchange (TSE) building in Tokyo, Japan.  (Reuters Photo)

TOKYO- The Asian stocks struggled yesterday as traders weighed the odds of a super-sized Federal Reserve interest rate cut.

However, short-term US bond yields ticked slightly higher.

The chances of the Fed kicking off its easing cycle with a super-sized cut of 50 basis points (bps) oscillated in Asia, retreating to 63 percent  early in the day from 67 percent  around the same time on Tuesday, before stabilizing around 65 percent , according to LSEG data.

Japan’s Nikkei stock average climbed as much as 1.3 percent  early on in reaction to overnight weakness in the yen, but pared those gains to just 0.23 percent as the currency rebounded.

China’s blue chips slipped 0.18 percent  after coming back online following a holiday-extended weekend, and Taiwan also returned from a day off to tumble 1 percent . Australia’s benchmark sagged 0.1 percent .

MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.27 percent .

Hong Kong and South Korea were among major markets closed for holidays.

Wall Street finished nearly unchanged on Tuesday, failing to sustain early momentum that pushed the S&P 500 and Dow to record intraday highs. S&P 500 futures pointed 0.06 percent  higher on Wednesday.

Pan-European STOXX 50 futures were weaker though, down 0.19 percent.

“The (US) price action conveys the significant inflection point markets confront,” said Kyle Rodda, senior financial market analyst at Capital.com.

“If the Fed nails it at this meeting, the bull market could charge on. If it doesn’t, then it could signal a high water mark in this cycle.”

The dollar dropped 0.67 percent  to 141.365 yen although that followed a 1.26 percent  surge overnight.

The euro added 0.05 percent  to $1.1119. Sterling was steady at $1.3158.

At the same time, two-year US Treasury yields rose slightly to stand at 3.5962 percent , extending Tuesday’s advance.