By Gina Lee

Investing.com – Asia Pacific stocks were down on Tuesday morning, with caution lingering about the economic risks posed by potentially reduced central bank support and the omicron COVID-19 variant.

Japan’s was down 0.46% by 9:07 PM ET (2:07 AM GMT) and South Korea’s was down 0.36%.

The Australian dollar was at 0.24% lower.

Hong Kong’s Index slid 1.04%.

China’s was down 0.56% and the was down 0.39% after a plunge in developer Shimao Group Holdings Ltd.’s bonds and shares.

The will also announce their policy decision Wednesday. Other central banks such as the and will also announce their policy decisions this week.

Some investors were cautious before the policy decision.

“Volatility will remain elevated throughout all of this week’s rate decisions from the Fed, ECB, and the BOE,” Oanda Corp. senior market analyst Edward Moya said in a note.

“2022 is still expected to be a strong global growth story, but accelerated central bank hawkishness could be the one thing that helps deliver the first major pullback with U.S. equities.”

Others agreed.

“It has been a strong year, we expect it to end strong, but investors have to be careful with bubble assets,” ERShares chief investment strategist Eva Ados, told Bloomberg.

“The worst when it comes to inflation is behind us. In some way, asset tapering is already in place. We are cautiously optimistic, but there are many risks on the horizon too.”

Omicron worries were back in the news after Omicron reported that this variant is a very high global risk. Some evidence suggests that it could evade vaccinations. It added, however that there is not much clinical evidence to support its severity.

China has reported the first case of omicron, and the U.S. had more than 50 million COVID-19 cases.

Data-wise, the U.S. will be due earlier in the data with Chinese data including and due Wednesday.

Investors are also bracing for Friday’s “quadruple witching” day in U.S. markets, when options and futures on indexes and equities expire. S&P Dow Jones Indices quarterly rebalance will also come into effect after markets close on the same day.