In Asian Equity Markets Japan’s Nikkei share average took a breather on Wednesday after sharp gains, with some index-heavy stocks losing ground after the index hit a 26-year high in the previous session. The Nikkei ended 0.3 percent lower at 23,788.20, staying slightly below its 26-year high of 23,952.61. Index-heavy stocks such as chip equipment maker Tokyo Electron fell 1.7 percent and clothing store operator Fast Retailing declined 1.2 percent. Financial companies, which invest in higher-yielding products such as foreign bonds, climbed, with the insurance sector and the banking sector both rising 1.3 percent. Dai-ichi Life Holdings gained 2.6 percent, T&D Holdings added 1.8 percent, Mitsubishi UFJ Financial Group advanced 1.6 percent and Mizuho Financial Group gained 1.0 percent.

In Currency Markets the US dollar extended losses against the yen on Wednesday after the Bank of Japan’s move to trim Japanese government bond (JGB) purchases in the previous session triggered speculation that it could begin tapering its massive, ultra-easy monetary stimulus. Despite some support from higher U.S. yields, the dollar slipped 0.3 percent to 112.31 yen, struggling in the wake of a 0.5 percent decline on Tuesday when Japan’s central bank slightly reduced the amount of its JGB purchases in its regular buying operations. The dollar earlier slipped as low as 112.17 yen, its lowest since Jan. 2. The euro was steady on the day at $1.1937, well below its nearly four-month high of $1.2089 set last Thursday. Sterling was slightly lower at $1.3534 , but remained supported by expectations that Brexit talks will have a positive outcome.

In Commodities Markets oil prices edged higher on Tuesday, with U.S. crude touching its highest since December 2014, supported by OPEC-led production cuts and expectations that U.S. crude inventories have fallen for an eighth week in a row. U.S. West Texas Intermediate (WTI) crude rose 2 percent, to settle at $62.96 a barrel after touching its highest since December 2014 at $63.24. Brent crude ended the session up 1.5 percent, at $68.82 per barrel after hitting a session high of $69.08, its highest since May 2015. Both contracts had their strongest close since December 2014. Prices extended gains in post-settlement trade after industry group the American Petroleum Institute said crude inventories fell by 11.2 million barrels in the week to Jan. 5 to 416.6 million, compared with analysts’ expectations for a decrease of 3.9 million barrels.

In US Equity Markets indexes rose to record highs on Tuesday as investors remained optimistic about the market heading into the corporate earnings season. The S&P 500 hit a fresh all-time high, rising 0.1 percent to close at 2,751.29. The index is also enjoying its best start to a year since 1987. The S&P 500 is up 2.7 percent for the year, notching its biggest six-day gain to kick off a year since then. The Dow industrial average jumped 0.5%  to 25,385.80 as Boeing reached an all-time high. The Nasdaq composite climbed 0.1 percent and closed at 7,163.58. Shares of Under Armour fell 5.4 percent on Tuesday, after Susquehanna downgraded the athletics apparel to “negative” from “neutral,” noting the Under Armour brand remains at risk. Financial giants BlackRock, J.P. Morgan Chase and Wells Fargo are among the companies set to report quarterly results later this week.

In Bond Markets Japanese government bonds slipped on Wednesday, with 10-year futures falling the most since late September and yields on benchmark cash bonds hitting highest since October, after the Bank of Japan trimmed its bond buying. The benchmark 10-year JGB yield rose 1.5 basis points to 0.080 percent, its highest level since Oct. 23. In the superlong zone, the 20-year yield was 1 basis point higher at 0.595 percent, its highest since Nov. 1, while the 30-year yield was up 1.5 basis points at 0.845 percent, its highest since Dec. 6. A decent 10-year auction provided some support to JGBs. The Ministry of Finance offered 2.3 trillion yen ($20.47 billion) of 10-year JGBs with a 0.10 percent coupon. The sale drew bids of 3.74 times the amount offered, slightly up from the previous sale’s bid-to-cover ratio of 3.70 times.

Todays’ inflection points

• 10:30 GMT +1 GBP Industrial production
• 10:30 GMT +1 GBP Trade balance
• 15:00 GMT +1 USD Fed’s Evans (non-voter, dovish) speaks
• 16:30 GMT +1 USD DOE U.S. crude oil inventories
• 19:30 GMT +1 USD Fed’s Bullard (non-voter, dovish) speaks