Trade in Asia was lightened by a holiday in Japan and markets in Hong Kong and China opened around flat.

Gold rose back above US$5,000 an ounce and Treasury futures climbed a little, with the cash market closed.

Benchmark 10-year US Treasury yields fell nearly six basis points overnight and touched a one-month low of 4.14 percent after data showed a 0.1 percent dip in core US retail sales in December and downward revisions to November and October figures.

Yields fall when bond prices rise. The S&P 500 closed 0.3 percent lower, as a recovery from last week's heavy selling in software shares starts to lose momentum.

Alphabet shares, which fell 1.8 percent, weighed on the market as the Google parent is in the midst of raising debt to fund an AI infrastructure spending spree.

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In Asia, S&P 500 futures were 0.2 percent higher. Nikkei futures rose, though the cash market was shut for a holiday, and earnings drove moves in the Australian market, which was up 1 percent around the middle of the day in Sydney.

Commonwealth Bank of Australia shares jumped 7 percent as Australia's top mortgage lender posted record earnings, loan growth, held market share and lifted its dividend.

Shares in CSL, a biotech company that makes most of its money selling blood plasma treatments for rare illnesses, dived 12 percent and touched eight-year lows after the company reported a fall in first-half profit and, late on Tuesday, announced the departure of its CEO.

Australia's beleaguered bourse operator ASX, which has run into trouble with regulators as it tries to overhaul its trading technology, also announced the departure of its CEO late on Tuesday and shares were down 5.5 percent on Wednesday.

**Jury's out on yen bounceback**

In currency markets, a resurgent yen and a rising yuan have the dollar on the back foot.

The yen, trading at 153.96 per dollar, gained nearly 1 percent on the greenback on Tuesday and has bounced 2 percent since Japan's Prime Minister Sanae Takaichi and her ruling Liberal Democratic Party swept to a landslide election win on Sunday.

Many investors had been expecting a weaker currency on nerves about how Takaichi would pay for stimulus plans. But bond markets have been surprisingly steady since her victory, stocks have soared and so some investors are rethinking assumptions.

“To be long yen, you need to believe that the correlation to Nikkei will break and it becomes an unhedged ‘buy Japan’ trade,” said Brent Donnelly, a currency trader and founder of analytics firm Spectra Markets.

“That’s possible. I just think the jury’s still out.”

The yen also rose sharply on crosses overnight. The euro was steady at $1.1894 while the kiwi and Aussie held on above 60 cents and 70 cents, respectively.

China's yuan was steady in early trade after surging to its highest in almost three years on Tuesday, riding corporate demand for cash ahead of the Lunar New Year break.

Data showed China's consumer prices rose just 0.2 percent in January from the same month last year, missing expectations for a 0.4 percent rise and underlining the weakness of domestic demand.

That supported Chinese government bond futures.

Brent crude oil futures steadied at $68.80 a barrel with markets hanging on US-Iran diplomacy. Bitcoin has struggled to progress beyond the $70,000 barrier and was pinned around $69,000 on Wednesday.

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