Australian shares fall in early trade, Japan points to a cautious open in Asia

• Australia's ASX 200 was down 0.58% in early trade where the country's so-called Big Four banks struggled for gains.
• Overnight, Federal Reserve Chair Jerome Powell said in his testimony to U.S. Congress that the American economy is a long way from its employment and inflation goals.
• He said that it will likely take time for substantial further progress to be achieved, and that inflation is still "soft."

SINGAPORE — Australian shares fell in early trade Wednesday, led by losses in the gold, communications and material sectors.

The benchmark ASX 200 was down 0.58%. The heavily-weighted financials subindex slipped 0.63% as the country's so-called Big Four banks struggled for gains.

Shares of ANZ were down 0.6%, Commonwealth Bank shares dropped 0.44%, Westpac fell 1.03% and the National Australia Bank declined 0.68%.

Nikkei futures pointed to a cautious open in Japan, where markets were closed on Tuesday for a public holiday.

The session in Asia follows a mixed finish on Wall Street, where the Dow Jones Industrial Average reversed steep losses after Federal Reserve Chair Jerome Powell eased some of the worries around higher interest rates and inflation.

Powell testimony

Powell said in his testimony to U.S. Congress that the American economy is a long way from its employment and inflation goals and that it will likely take time for substantial further progress to be achieved. He added that inflation is still "soft" and that the Fed is committed to current policy.

Central banks are taking a mixed view on the rise in yields, according to Tapas Strickland, director of economics and markets at the National Australia Bank.

"Chair Powell has managed to tread that fine line of endorsing market moves, but not adding to them by re-iterating his dovish stance," Strickland wrote in a morning note.

Currencies and oil

In the currency market, the U.S. dollar traded up 0.12% at 90.114 against a basket of its peers, recovering from an earlier low around 89.943. The Australian dollar traded relatively flat, changing hands at $0.7912.

The greenback "fell in line" with U.S. equities following Powell's Congressional testimony, but the moves in the currency were "modest," according to Carol Kong, a currency strategist at the Commonwealth Bank of Australia.

Better U.S. and global growth prospects remain consistent with a downtrend in the counter-cyclical dollar, Kong said.

Elsewhere, oil prices dipped. U.S. crude futures were down 0.45% at $61.39 a barrel on Wednesday during Asian trading hours.

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