Japan stocks set for higher start as investors watch oil prices

SINGAPORE — Shares in Japan looked to rise on Wednesday as investors were set to watch oil prices and continue assessing Fed policy.

The Nikkei futures contract in Chicago was at 27,515 while its counterpart in Osaka was at 27,440. That compared against the Nikkei 225's last close at 27,224.11.

Over in Australia, the S&P/ASX 200 climbed 0.48% in morning trade.

Investors will monitor moves in the oil markets, with sources telling CNBC that the European Union is unlikely to impose an immediate oil embargo on Russia over its unprovoked invasion of Ukraine.

Oil prices fell after gains in the past few days. International benchmark Brent crude futures slipped more than 1% on Tuesday, last sitting at $115.48 per barrel. Still, it continues sitting above the $100 per barrel mark that it fell below last week.

Overnight on Wall Street, the S&P 500 climbed 1.13% to 4,511.61. The Dow Jones Industrial Average advanced 254.47 points, or 0.74%, to 34,807.46. The Nasdaq Composite surged 1.95% to 14,108.82.

Markets will continue to assess the outlook for U.S. Federal Reserve policy.

U.S. Federal Reserve Chairman Jerome Powell said earlier this week that the central bank is set to take tough action on inflation, with traders now betting the Fed will drive up interest rates even faster than expected just last week.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.493 following a recent drop from above 98.8.

The Japanese yen traded at 121.13 per dollar, weaker than levels below 120 seen against the greenback yesterday. The Australian dollar was at $0.7474, largely holding on to gains after yesterday's rise from around $0.738.