(Reuters) - Asian stocks inched lower and the dollar was firm on Thursday as looming central bank meetings in Europe and Japan and uncertainty over the supply of Russian gas kept traders on edge.
Wall Street indexes rallied overnight but even better-than-expected results from Tesla after hours couldn't carry the positive mood into the Asia session.
Nasdaq 100 futures fell 0.3% and S&P 500 futures fell 0.2%. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2% and Japan's Nikkei fell 0.1%.
Market focus is on the resumption of gas flow along the biggest pipeline from Russia to Germany. A planned 10-day outage is set to end at 0400 GMT. If flow isn't resumed, or is lacklustre, it will stoke worries about winter supplies.
Two sources familiar with the plans of Russia's monopoly gas exporter, Gazprom, told Reuters on Tuesday that flows were likely to restart at pre-maintenance levels of 40% of capacity, which would probably be enough to calm markets for now.
The European Central Bank also meets on Thursday to begin Europe's rate-hike cycle. Markets are hedging bets on a hike of either 25 basis points or 50 bps, with the latter perhaps able to support a euro that has slipped below $1 this month.
"They need to be raising rates to deal with the way inflation is embedded," said George Boubouras, head of research at K2 Asset Management in Melbourne.
"But the dilemma they've got is that the lack of energy security planning has regions of the European Union in a very difficult position...one can only assume that you've got minimal upside and large downside risks to the European economy."
The euro wavered overnight and bought $1.0191 early in the Asia session. Traders also await details of an ECB plan to steady bond spreads in Europe by buying extra debt from periphery countries to keep a lid on yields.
The Bank of Japan ends a two-day meeting later on Thursday and although no policy change is expected, the outlook will be closely watched as will the reaction in currency and bond markets where some funds have bet on a shift.
A cloud over Chinese growth due to its strict COVID-19 controls and fresh concern over stability in the property market is also casting gloom over the prospects for global demand.
U.S. President Joe Biden expects to speak to his Chinese counterpart by the end of the month, but markets are sanguine as to whether much of a thaw in Sino-U.S. ties is possible or whether it can arrest economic problems.
Growth-sensitive commodities such as copper and iron ore have been sliding and this week Chinese banks and property stocks have been hurt by borrowers boycotting repayments on unfinished real estate.
"Past due mortgages doubled over the week, and ... potential home buyers are waiting for a general drop in home prices for the housing market, including completed projects," ING analysts said in a note to clients on Thursday.
"This is negative even for cash-rich developers."
China's yuan was under pressure in morning trade at 6.7700 to the dollar. Against other currencies the greenback steadied after dipping earlier in the week. The Australian dollar bought $0.6890.
Sterling, at $1.1983, didn't get much of a bounce from British inflation zooming to a 40-year high, even though it stoked bets on rate rises. Traders have a wary eye on the race to replace Boris Johnson as Prime Minister.
Beyond the ECB, investors have scaled back bets on a 100 bp rate hike from the Federal Reserve next week, with a 75 bp hike seen most likely. But the retreat has come in concert with a deepening of economic growth worries.
The benchmark 10-year Treasury yield held at 3.0172% in Asia, below the 2-year yield of 3.2293%, a market signal that often presages a recession.