Equity futures in the United States showed slight recovery, with S&P 500 futures edging up after a weak close on Wall Street the day before, while major European and Asia-ex-Japan indexes posted small but positive gains across the trading day.

A more composed atmosphere in the Japanese government bond market contributed to the broader sense of stability, after a strong auction provided reassurance to investors monitoring yields that had reached multi-year highs in recent weeks.

Japanese 10-year and 30-year yields eased slightly, helping soothe nerves after a prolonged sell-off driven by concerns over fiscal pressures and potential tightening by the Bank of Japan, which had earlier pushed yields to their highest levels in decades.

The earlier bond decline in Japan had extended pressure to major government debt markets worldwide, including the United States and Germany, where yields had jumped sharply on Monday and weighed on risk appetite across asset classes.

By Tuesday, however, global bonds appeared to be taking direction from calmer Japanese trading, with U.S. 10-year Treasury yields holding near 4.11% and German 10-year Bund yields steady at around 2.77% in broadly subdued movement.

Bitcoin also regained some footing after a severe slide on Monday, though the digital asset remains strongly lower from its recent highs, reflecting persistent caution among traders in the cryptocurrency sector.

At around $87,000, bitcoin is down about 30% from its October peak, prompting analysts to frame the recent retreat as part of a broader adjustment following weeks of volatility and shifting sentiment in digital asset markets.

Market watchers noted that bitcoin’s movements, while sharp, have not significantly spilled into broader financial markets, though investors in the crypto space described sentiment as increasingly anxious and highly reactive.

Some digital asset specialists said the latest decline had caught many market participants off guard, and suggested that the coming months may prove especially important in determining whether the sector regains its earlier momentum or continues a period of consolidation.

In currency markets, the Japanese yen softened slightly on Tuesday as both the U.S. dollar and the euro saw mild gains against the currency, though the moves followed a stronger performance for the yen earlier in the week.

Market participants appeared somewhat less concerned about possible intervention from Japanese authorities than in recent days, with trading direction influenced more by expectations regarding policy moves in Tokyo and abroad.

The dollar remained broadly steady, though some investors are beginning to anticipate a more sustained weakening trend as the United States prepares for additional interest rate cuts expected to come faster than in several other major economies.

Recent economic data reinforced expectations of a rate cut by the Federal Reserve in December, with manufacturing activity contracting for the ninth month in a row even as consumer spending surged at the start of the holiday season.

Gold prices eased modestly but remain close to recent all-time highs, supported by firm demand during periods of economic uncertainty and shifting expectations for monetary policy across major markets.

Other precious metals also edged lower, while oil prices retreated slightly after recent geopolitical tensions had lifted energy markets, with Brent crude hovering just under $63 a barrel and U.S. crude trading near $59.

Global investors continue to assess a complex mix of factors including central bank policy trajectories, energy-market risks, macroeconomic data and seasonal trading patterns as the year approaches its final weeks.

Oil prices slipped, after surging over 2% overnight to seven-week peaks as a surprise drop in U.S. crude inventories added to supply worries amid export issues in Iraq, Venezuela and Russia.

European stocks are set for a subdued open, with EUROSTOXX 50 futures off 0.1%. S&P 500 futures and Nasdaq futures were flat ahead of a lineup of Federal Reserve officials, whose remarks will be closely watched for their views on interest rates.

San Francisco Fed President Mary Daly said further rate cuts will likely be needed but the timing remained unclear. Earlier in the week, Fed Chair Jerome Powell had struck a cautious tone about further rate cuts, after the central bank delivered the first easing this year just last week.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS),slipped 0.1%, having rallied over 5% for the month and 9% for the quarter. Japan’s Nikkei (.N225), rose 0.2%, after jumping 7% for the month and 13% for the quarter.

“It must be said that fresh catalysts were lacking across the board, with little by way of impactful news or data-flow to move the needle especially much,” said Michael Brown, a senior research strategist at Pepperstone.

“Long equities also continues to make a lot of sense… The Fed’s ‘run it hot’ approach tilts risks to the outlook to the upside, and marks a restoration of the ‘Fed put’ dynamic with which participants have become so familiar over the years.”

Chinese shares outperformed, with blue chips (.CSI300), 0.7% higher and Hong Kong’s Hang Seng (.HSI), advanced 0.2%. Chinese tech shares (.HSTECH), are up for the eighth straight week, the longest winning streak on record on AI optimism.

Overnight, Wall Street closed lower for a second straight session as investors booked profits from record-high stocks. Futures still imply a 92% chance for a rate cut from the Fed in October, but the total expected easing has faded to 100 bps, from 125 bps a few weeks ago.

Next up, the spotlight will be on U.S. economic data, including the Fed’s preferred gauge of inflation, the Personal Consumption Expenditures report on Friday and the final estimate for second-quarter GDP on Thursday, while the prospect of a government shutdown looms large

The Treasuries market see-sawed as markets absorbed a huge amount of higher corporate and government bond supply. The benchmark U.S. 10-year Treasury note yield was flat at 4.1408%, having risen 3 basis points overnight, reversing Monday’s fall.

The Treasury Department will auction $44 billion in seven-year notes on Thursday, following auctions of five-year and two-year notes earlier in the week.

In foreign exchange markets, the dollar index held onto overnight gains at 97.82, having bounced 0.6% overnight. That left yen bulls in a spot of bother after some piled into long yen positions after the Bank of Japan’s hawkish hold on policy last week.

“A lot of guys, whether they’re macro or discretionary, have been on the wrong foot looking for dollar/yen to trade lower and that dollar/yen move would certainly be causing some concerns,” said Tony Sycamore, analyst at IG.

That spilled into yen crosses, with the Swiss franc hitting an all-time high on the yen and the euro hovering at over a one-year peak at 174.66 , just below a record top of 175.90.

The Swiss National Bank is expected to hold its policy rate at zero later in the day, its first pause since late 2023.

In commodity markets, spot gold prices were flat at $3,739 an ounce, having slipped 0.7% overnight in the face of a strong dollar.

U.S. crude slipped 0.4% to $64.73 a barrel, while Brent was off 0.3% at $69.11.