Asian stocks fell a second day after Federal Reserve minutes showed some U.S. policy makers were concerned about low inflation. Shares in Japan gained as the yen weakened past 118 per dollar.
The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 139.54 as of 9:04 a.m. in Tokyo after dropping 0.7 percent yesterday. Data showed Japan’s trade deficit narrowed after exports gained 9.6 percent last month from the previous year, the biggest gain in eight months. The yen slid 0.2 percent to 118.15 per dollar, trading near its lowest since August 2007.
“The Fed surprised everybody with the hint that they were watching deflation,” Kirk Hartman, president and chief investment officer of Wells Capital Management in Los Angeles, said on Bloomberg Television. “To me, the Fed is still steady as she goes and I think next week the story will be that there are no imminent rate hikes until late 2015.”
Hang Seng down
Hong Kong’s Hang Seng Index is heading for its biggest weekly decline since March as buy orders for Shanghai shares through the Hong Kong exchange link slowed to a trickle after the program’s debut this week. International investors bought a net 2.6 billion yuan ($424.7 million) of Shanghai shares out of the 13 billion yuan daily limit under the link yesterday, while mainland investors used about 2.4 percent of their 10 billion yuan quota for Hong Kong stocks. Japan’s Topix index climbed 0.6 percent.
South Korea’s Kospi index slid 0.3 percent. Australia’s S&P/ASX 200 Index sank 0.5 percent. New Zealand’s NZX 50 Index added 0.1 percent. Markets in China and Hong Kong have yet to open. Preliminary data today is expected to show China factory activity slowed from last month.