Asia investors cautious ahead of Fed meeting Tuesday 04.30 BST. Asian markets opened a touch lower as investors remained cautious ahead of Wednesday's Federal Reserve meeting, which may yield more detail on any planned reduction in asset purchases. "Calm has settled over markets as anticipation builds ahead of tomorrow's Fed FOMC outcome," said Mitul Kotecha, strategist at Credit Agricole, in a note to clients. It's worth reiterating that effective Fed communication is the key to ensure that this calm continues, otherwise market volatility will quite easily return. All eyes and ears will be on chairman Ben Bernanke's post-meeting press conference for any hints about a possible "tapering" of its $85bn-a-month asset purchase programme. "Mr Bernanke is likely to once again stress that, first, tapering of quantitative easing is not a tightening of monetary policy but rather a scale down of monetary easing; and, second, that a scale down of QE does not imply that the Fed has moved the timing of its first Fed funds rate hike closer," said Signe Roed-Frederiksen, senior analyst at Danske Bank. Indeed, many commentators noted that the Fed appeared to have struggled to communicate those points to the markets - or that the markets were failing to listen properly. "Since early May, the market has pulled in expectations of the first rate hike by more than six months, to February 2015," said Michael Hanson, US economist at BofA-Merrill Lynch. At one point last week, the first Fed hike had been moved in to November 2014. We expect Mr Bernanke to push back against the idea that the Fed has moved significantly closer to beginning a tightening cycle, even as he likely leaves open the door for tapering to start later this year. But Jim Leaviss, head of retail fixed interest at M&G Investments, offered a different view. "Given the stuttering nature of the US growth recovery, the case for a slowing of QE in the next few months is not at all strong," he said. Furthermore, Mr Leaviss suggested that falling measures of core inflation and weak wage growth were giving the Fed the scope to ease policy further. With rates at the zero bound and a cut impossible, unconventional monetary policy would have to take the strain. More, not less, QE might be more likely than any tapering. The S&P 500 rose 0.8 per cent on Monday after a mid-session wobble on concerns that Fed tapering might be imminent. In Europe, the FTSE Eurofirst 300 rose 0.7 per cent. In early Asian trading on Tuesday, the Nikkei 225 dropped 0.7 per cent, while the broader Topix index edged down 0.2 per cent. Sony was the standout gainer, rising 4.4 per cent on news that activist hedge fund manager Dan Loeb had increased his stake in the company. Mr Loeb also sent a letter to Sony's chief executive repeating his call for the company to be broken up. The yen remained steady against the US dollar at Y94.78, while the yield on 10-year Japanese government bonds was flat at 0.83 per cent. Australia's ASX 200 lost 1 per cent, as the Aussie fell back against the US dollar to 0.9522. Earlier in the week the Australian currency had risen as high as 0.9631 against its US counterpart. In Hong Kong, the Hang Seng index slipped 0.6 per cent, while mainland Chinese stocks were flat. Southeast Asian markets continued their recent bounce, with the Philippines index rising 1.9 per cent and Indonesian stocks adding 1.4 per cent. Follow the FT's market comments on Twitter @FTMarkets.