Asian stocks slide, yen wobbles ahead of BOJ verdict
Asian stocks fell on Friday as investors pondered the outlook for U.S. rates after the Federal Reserve tempered its rate-cut views even as inflation came in softer than expected, while the yen was shaky before the Bank of Japan's policy meeting.
The dollar was hovering near a one-month high on the back of the hawkish tone from the Fed this week, while political uncertainty in Europe kept the euro under pressure.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.48% lower. Chinese stocks also fell, with the blue chip shares down 0.3%, while Hong Kong's Hang Seng was 0.79% lower.
Japan's Nikkei declined 0.25%, while the yen was slightly weaker at 157.185 per dollar in early trading ahead of the BOJ meeting where the central bank is likely to keep interest rates ultra-low.
But the focus will be on whether the BOJ will take steps to trim its bond purchases or drop clues on its future tapering plans and start reducing its huge balance sheet.
A Reuters poll showed nearly two-thirds of economists expect the BOJ to start tapering its monthly bond buying, now set at around 6 trillion yen ($38 billion), on Friday.
«It is possible that the BOJ will tweak its JGB buying operation with only a small reduction, but we are not sure that the BOJ will start cutting without a grace period,» said ING economists in a note.
The yen's decline to a 34-year low of 160.245 per dollar at the end of April triggered several rounds of intervention by Japanese authorities totalling 9.79 trillion yen ($62.25 billion).
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