The US Federal Reserve is likely to cut its rate in July and then by the end of 2019, said Paul Kitney, chief equity strategist, Daiwa Capital Markets, adding that there will be at least one this year.

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“There will be one through this year. The probability of a cut in July is fairly high and then possibly later this year," he said in an interview with CNBC-TV18.

The US Fed has left its lending rates unchanged at 2.25-2.5 percent. The Fed statement was dovish primarily on inflation and neutral on growth. The Federal Open Market Committee (FOMC) maintained its stance on the economic outlook as 'moderate' while the jobs market remained 'solid'.

“What the Fed did was quite prudent. We have got the G20 coming up. We could get some binary events on trade deals ahead of that and also some important data points including the labour market to come out,” said Kitney.

“The key variable here that the Fed is looking at is inflation expectation, as is the European Central Bank (ECB), as is the Bank of Japan,” he added.

Speaking about markets front, Kitney said, “We are very concerned about the strength in the Japanese yen and the correlation with earnings in that country.”

“We are 'overweight' on Asia ex-Japan. Our biggest 'overweight' are India and also emerging Association of South East Asian Nations (ASEAN) primarily because of defensive growth characteristics; their growth profile is less correlated with the global trade cycle in contrast with our big 'underweights' which are Korea and Taiwan which are heavily geared into the global trade cycle and much more vulnerable in the economic downturn,” added Kitney.