Asian markets experienced volatility on Wednesday as investors responded to Federal Reserve Chairman Jerome Powell's comments hinting at prolonged higher interest rates, which offset a rebound following Middle East-related concerns. Traders are also closely monitoring geopolitical tensions between Israel and Iran.

Asian markets faced a day of fluctuation on Wednesday driven by mixed signals from the Federal Reserve and ongoing geopolitical concerns in the Middle East. Federal Reserve Chairman Jerome Powell's remarks suggesting that interest rates could remain elevated for a longer period than anticipated due to persistent economic challenges impacted investor sentiment. Powell highlighted the strength of the labor market and progress on inflation but emphasized the need for patience in assessing economic data before adjusting monetary policy.

Powell's comments came amid a backdrop of heightened tensions in the Middle East following Iran's missile and drone attack over the weekend, prompting concerns about potential escalation between Iran and Israel. Israel's army chief, General Herzi Halevi, indicated that there would be a response to Iran's actions, raising fears of wider regional conflict.

In response to these developments, Asian markets displayed mixed performance. Tokyo, Hong Kong, and Seoul saw declines, while Shanghai, Sydney, Singapore, Wellington, Taipei, and Manila recorded gains. The S&P 500 and Nasdaq closed lower in New York, although the Dow managed a modest increase.

Market analysts highlighted the impact of Powell's "hawkish tone" on markets, reflecting ongoing inflationary pressures and the robust state of the US economy. Powell's stance signaled a departure from earlier expectations of multiple interest rate cuts this year, with markets now speculating on fewer rate adjustments, potentially starting in July or September.

Despite geopolitical uncertainties, trading remained relatively calm, with oil prices showing a slight decline despite crises in the Middle East, Ukraine, and OPEC output cuts.

Market figures as of 0250 GMT included the Nikkei 225 down 0.2% in Tokyo, the Hang Seng Index down 0.5% in Hong Kong, and the Shanghai Composite up 1.1%. Major currency pairs showed minor fluctuations, with the dollar/yen down slightly, the euro/dollar and pound/dollar both up, and oil prices (West Texas Intermediate and Brent North Sea Crude) showing a modest decrease.

---