Asia stocks slide amid China woes; Japan catches up on chip sell-off. Concerns about the Chinese real estate market caused declines in markets from Hong Kong to Australia on Tuesday, as Japanese investors dropped semiconductor stocks upon their return from a holiday-extended weekend.

In anticipation of Wednesday’s Federal Reserve’s rate decision, traders watched benchmark U.S. Treasury rates hovering near 16-year highs and the dollar holding close to six-month highs. This week also includes policy announcements from the Bank of Japan and the Bank of England.

Concerns about stagflation were stoked as crude oil prices rose despite a tightening supply.

The largest Asia-Pacific share index maintained by MSCI (.MIAP00000PUS) decreased by 0.3%.

The Nikkei in Japan (.N225) fell 1.1% as a result of steep declines in chip-related firms, including Tokyo Electron (8035.T) and Advantest (6857.T).

Monday saw the closing of Japanese markets as Asian tech shares fell after a Reuters report that TSMC (2330. TW) has urged its main vendors to postpone deliveries.

Tuesday saw a 0.4% decline in that stock, turning around a 0.6% earlier rise. On Monday, it fell 3.2%.

The TSMC news, according to John Pearce, CIO at Unisuper, was “surprising.”

The need for semiconductors, he continued, was “the one thing you were almost certain of.”

A subindex of tech equities (. HITECH), part of Hong Kong’s Hang Seng (.HSI), fell 0.6%. The blue-chip index for the mainland (.CSI300) decreased by 0.3%.

Chinese real estate stocks were erratic; a Hang Seng developers subindex (.HSMPI) dropped as much as 1.2% at one point before turning positive about midday, though it was last down 0.4%.

Due to mining companies’ (.AXMM) weight and concerns over Chinese demand, Australia’s stock benchmark (.AXJO) fell 0.4%.

However, Country Garden (2007. HK), the final of the eight bonds it has been seeking extensions for, received consent from creditors to postpone repayment on another onshore bond, offering some glimmer of hope, sources said.

The $9 billion offshore debt restructuring plan of Peer Sunac China Holdings (1918. HK) was approved by creditors, marking the first time a significant Chinese developer had received clearance for such a restructure.

American stock futures indicated lower by 0.1% due to the decline in Asian markets. Global Stoxx 50 futures were unchanged.

The U.S. dollar index, which compares its value to six major peers, increased 0.09% to 105.17, moving back toward its six-month high of 105.43. Currency markets were generally quiet.

The dollar increased by 0.1% to 147.75 yen, moving it closer to the 10-month high of 147.95 set last week.

EUR/USD dropped 0.1% to $1.0679.

Ten-year rates barely changed at 4.31%, remaining close to the highest level since 2007 of 4.366% on August 22.

With the Fed leading a series of central bank meetings this week, Kyle Rodda, senior financial market analyst at Capital.com, stated in a note, “You can’t blame people for keeping to the sidelines for now.”

According to Rodda, “given the variability in results, there will unavoidably be crosscurrents in the markets.” Price movement could be erratic, necessitating more careful risk management.

The odds of the Fed raising rates again by a quarter-point by the end of the year are divided among traders, but they are almost certain that they will do so after a two-day meeting that starts later on Tuesday.

The most recent forecasts from Fed officials regarding the state of the economy and where rates will likely be in the upcoming quarters will also be made public.

Amid growing concerns about a supply shortage from Saudi Arabia’s and Russia’s continued production curbs, oil prices increased in early trade on Tuesday for the fourth session.

While Brent crude prices, the international oil benchmark, increased by 58 cents, or 0.61%, to $95.01 per barrel, U.S. West Texas Intermediate crude futures increased by 99 cents, or 1.1%, to $92.47.

“Given how supply-constrained energy markets are likely to become, especially amidst harsher weather approaching the end of the year, higher oil prices are both an upside risk to inflation and a downside risk to growth,” Rodda of Capital.com stated.

Markets that don’t export energy and experience energy instability may perform poorly.