Asian stock markets sank on Wednesday, tracking overnight losses on Wall Street as investors awaited an interest rate hike and more hawkish signals from the Federal Reserve.

Hong Kong’s technology-heavy Hang Seng index continued to lag its peers, falling 1.5%, while Japan’s Nikkei 225 index lost 1.3%. The day’s losses also negated a soft rebound seen earlier this week.

Market focus was squarely on the Federal Reserve, which is expected to hike interest rates by at least 75 basis points (bps) at the conclusion of a two-day meeting later in the day. Markets are also pricing in the possibility of a 100 bps hike, following hotter-than-expected U.S. inflation readings last week.

Asian stocks took a weak lead-in from Wall Street indexes, which plummeted as much as 1% amid increasing concerns that the Fed could strike a more hawkish tone than expected today.

The U.S. dollar rose to near 20-year highs, while Treasury yields also surged in anticipation of the hike.

Focus will be on the central bank’s inflation and interest rate expectations for the remainder of the year. Markets are pricing the U.S. benchmark rate to end 2022 well above 4%, compared to a current upper end of 2.5%.

Regional markets have fallen sharply this year as the Fed began raising interest rates, limiting the amount of liquidity available to markets. Overheated U.S. inflation, which is well above the central bank’s target rate, is expected to keep interest rates elevated until well into 2023.

China’s bluechip Shanghai Shenzhen CSI 300 index fell nearly 1%, while the Shanghai Composite index lost 0.5% after the European Chamber of Commerce, a top industry group, raised concerns over the country’s viability as an investment destination in the face of continued COVID-related disruptions.

The industry group’s warning comes as a series of COVID lockdowns eroded China’s economic growth this year, and also disrupted activity for several foreign firms operating in the country.

The Chinese yuan sank to an over two-year low on Wednesday.

Australia’s S&P/ASX 200 index fell 1.4%, with major miners leading losses. BHP Group Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO), the largest mining stocks in the country, sank 2.6% and 3.1%, respectively, after Rio CEO Jakob Stausholm warned that copper’s short-term outlook was under pressure from rising inflation.