Asian markets slipped yesterday after minutes from the US Federal Reserve’s latest policy meeting dealt a blow to hopes it would launch any new stimulus measures in the near term.
Regional shares followed Wall Street lower on disappointment that markets would not be greased with any more cash as the Fed said it would play a wait-and-see game.
Tokyo tumbled 2.29 percent, or 230.40 points, to 9,819.99, Seoul was 1.50 percent, or 30.67 points, off at 2,018.61, while Sydney closed flat, edging down 3.1 points to 4,333.9.
Taipei, Hong Kong and Shanghai were closed for public holidays.
Europe’s main stock markets fell in late morning deals yesterday, with London’s FTSE 100 index of top shares sliding 1.21 percent to 5,767.75 points, Frankfurt’s DAX 30 shedding 1.85 percent to 6,853.26 points and, in Paris, the CAC 40 losing 1.26 percent to 3,363.76.
The US Federal Open Market Committee’s meeting minutes from the middle of last month showed bankers considered improved employment, housing and financial market data as just “positive, on balance.”
The committee made limited mention of monetary easing.
However, it said some members “indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2 percent.”
The news surprised many Fed watchers and hit Wall Street, with the Dow falling 0.49 percent, the NASDAQ down 0.20 percent and the S&P 500 off 0.40 percent.
“The decline in US stocks suggests that market participants may have expected the Fed to do more,” Eric Viloria, senior currency strategist at Forex.com, said in a note.
“However, if the economy continues to firm as anticipated, the dip in equities may be seen as buying opportunities if the recovery becomes self-sustaining,” he added, according to Dow Jones Newswires.
The Fed minutes boosted the US dollar against the yen as they suggest there will be no more cash flooding the markets soon.
The greenback bought ￥82.62 in afternoon Asian trade, down from ￥82.78 in New York late on Tuesday — but well up from the ￥81.76 in Asia on Tuesday.
The euro bought US$1.3200 and ￥109.05 compared with US$1.3233 and ￥109.55 in New York.
Eurozone fears resurfaced after Spanish unemployment hit a new high last month, while other data showed the nation’s public debt would soar more than 10 percentage points this year to 79.8 percent of GDP.
The news stoked fears that another crisis similar to that of Greece was brewing in the eurozone.
On oil markets New York’s main contract, West Texas Intermediate, or light sweet crude, for delivery in May shed US$0.43 to US$103.58 per barrel. Brent North Sea crude for settlement next month was down US$0.20 at US$124.66 in the afternoon.
Gold was at US$1,643.75 an ounce at 6am GMT yesterday, compared with US$1,676.62 late on Tuesday.