Asian stocks stutter ahead of Fed, frail yen in focus
Asian stocks inched lower on Wednesday ahead of a keenly-awaited policy decision from the Federal Reserve later in the day, while the yen was stuck near one-year lows against the dollar, keeping markets on edge for possible intervention by Tokyo.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.13% lower, starting November in a sombre mood after clocking three straight months of losses.
Japan's Nikkei was 2% higher.
China shares eased 0.15%, while the Hong Kong's Hang Seng Index fell 0.75%.
China's factory activity unexpectedly contracted in October, a private survey showed on Wednesday, adding to a downbeat official manufacturing survey the previous day and raising questions over the country's fragile economic recovery at the start of the fourth quarter.
Market focus in Asia though was firmly on the yen in the wake of the Bank of Japan's decision to tweak its bond yield control policy again on Tuesday, further loosening its grip on long-term interest rates.
The move drove a broad slide in the yen on Tuesday, tumbling to a one-year low against the dollar and touching a 15-year low against the euro as investors had expected a bigger BOJ step towards ending years of massive monetary stimulus.
«The market has seen the tweak to a flexible regime as clear dovish development,» said Chris Weston, head of research at Pepperstone.
«Once again market players have been left frustrated by the lack of urgency shown by the BOJ, and either closed yen longs or flipped into outright yen shorts.»
The sharp drop in the yen prompted a fresh warning from Japan's top currency diplomat Masato Kanda that authorities were on standby to respond to recent «one-sided, sharp» moves in the currency.
The yen strengthened 0.27%
