Asian stocks dip after Fed tapers aggressive easing expectations

Asian stocks dipped on Wednesday and the dollar inched up from three-month lows after Federal Reserve officials tempered expectations in the markets for aggressive monetary easing.

Asian Stocks

  • Euro Stoxx 50 contracts lost 0.3% as of 3:18 p.m. in Tokyo, while S&P 500 futures rose less than 0.1%. The underlying gauge fell 1% Tuesday.
  • Japan’s Topix index fell 0.6% at the close.
  • South Korea’s Kospi was little changed.
  • Australia’s S&P/ASX 200 Index lost 0.3%.
  • Hang Seng rose 0.2%.
  • Shanghai Composite dropped 0.1%.

Currencies

The New Zealand dollar edged higher after the Reserve Bank of New Zealand (RBNZ) stood pat on monetary policy on Thursday, keeping rates at a record low 1.50%. But the kiwi’s gains were limited as the central bank expressed concern towards economic risks at home and abroad.

“Overall, today’s announcement provides a strengthened signal that another cut is coming, most likely soon, unless there is a marked improvement in the global outlook,” wrote economists at HSBC.

  • The yen was at 107.39 per dollar.
  • The offshore yuan held at 6.8889 per dollar.
  • The euro bought $1.1357.
  • The greenback had sunk to the six-month trough as the yen, a perceived safe haven, had drawn bids in the face of brewing U.S.-Iran tensions.
  • The kiwi last traded 0.2% higher at $0.6651.
  • The dollar index against a basket of six major currencies was up 0.15% at 96.302, extending modest overnight gains.

Bonds

  • The yield on 10-year Treasuries edged up to 2%.

Commodities

  • U.S. crude oil futures advanced roughly 2% to touch a four-week high of $59.10 per barrel after data showed a decline in U.S. crude stocks.
  • Spot gold slipped from a six-year high of $1,438.63 an ounce scaled on Tuesday after the comments from Fed officials trimmed expectations for a rate hike in July.
  • Gold was down 1% at $1,407.61 an ounce, headed to snap a six-day winning streak. The precious metal was still up 8.5% so far this month.

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