Asian markets tumbled Wednesday as investors grow increasingly sceptical that the Federal Reserve will cut interest rates as much as hoped this year, while a massive earthquake in Taiwan added to the sense of gloom.

Traders have pushed equities higher for months, driven by optimism that the central bank will begin easing monetary policy this year as inflation comes back towards officials' two percent target.

But forecast-busting data on a range of indicators including inflation, factory activity and jobs has dealt a hefty blow to those hopes, and now expectations are beginning to wane.

The year began with expectations for six cuts in 2024 but that has slowly been whittled down to three, and some are now concerned that the Fed could even cut fewer than that.

Two central bank officials said on Tuesday that they still saw three this year but were in no rush to act too quickly.

Cleveland president Loretta Mester, however, warned that it was a close call on whether decision-makers make fewer reductions.

She also lifted her outlook for the long term level of rates to 3.0 percent from 2.5 percent -- compared with the Fed's 2.6 percent. Rates are currently sitting at a 23-year high of between 5.25 and 5.50 percent.

And San Francisco boss Mary Daly added that three cuts was "a very reasonable baseline" but added that economic growth "is going strong, so there's really no urgency to adjust the rate".

Better-than-expected figures on job openings and factory orders -- along with rising oil prices -- have added to the sense that more work will be needed to bring inflation down.

"Our base case is that the Fed engineers a soft landing and starts to cut rates in the second half of the year," Gargi Chaudhuri, of BlackRock, said.

"The downside risks to economic growth have diminished, so the risk of only two Fed rate cuts now appears higher than the risk of four cuts."

After a retreat on Wall Street, which has also been fuelled by profit-taking after a run-up that has seen the Dow and S&P 500 hit multiple records, markets across Asia struggled.

Tokyo sank around one percent, while Hong Kong, Sydney, Seoul and Manila were off more. Shanghai, Singapore, Wellington and Jakarta were also well in the red. Mumbai and Bangkok rose.

London fell at the open while Paris and Frankfurt were both higher.

Taipei fell after a deadly 7.4-magnitude earthquake just off Taiwan's east coast, which added to the regional uncertainty, though there was some relief that the threat of a tsunami had dissipated.

Still, traders were keeping tabs on the effects of the tremor, which left several buildings collapsed and forced chip giants TSMC and United Microelectronics Corporation to halt work at their plants.

TSMC was down more than one percent and UMC shed one percent.

Gold prices briefly struck a fresh record high of $2,288, building on its run this year that has been fuelled by hopes for central bank rate cuts as well as rising tensions in the Middle East, which has boosted its demand as a safe haven in times of turmoil.