Asian shares weaken, dollar up after Fed's latest statement


Asian shares weaken, dollar up after Fed's latest statement

The dollar weakened against a basket of currencies on Thursday, pulling back from a more than two-week peak as bets stoked by the Federal Reserve signaling it may raise interest rates in December abated.

Wall Street was set to open flat, index futures indicated, as European shares edged lower.

The Norwegian crown was down 0.1 percent against both the euro and the dollar as traders awaited the policy decision by the Norwegian Central Bank due at 0800 GMT.

The greenback advanced to more than a 2-month high of 112.72 versus the yen and more than a 5-week high of 0.9743 against the Swiss franc, from Wednesday's closing values of 112.21 and 0.9698, respectively. The U.S. central bank said after a two-day meeting it will begin reducing its $4.5 trillion holdings of government bonds and mortgage-backed securities. It will issue new economic forecasts and Fed Chair Janet Yellen holds a news conference.

INVESTOR INSIGHT: "The Fed's seemingly hawkish views on sustained lift-off in US interest rates may be seen as a form of pressure for regional equities and could dampen prices today", said Jingyi Pan, market strategist at IG in Singapore.

US 10-year Treasury yields, which edged up on Tuesday, retreated 1.8 basis points on the day to 2.23 percent.

The TOPIX index of all First Section issues finished Tuesday trading up 28.94 points, or 1.77 percent, at 1,667.88, also the highest finish since August 18, 2015.

The dollar built on the previous day's gains yesterday after the Federal Reserve unveiled plans to wind down its crisis-era stimulus and hinted at another interest rate hike before the end of the year.

The dollar stood little changed at 111.455 yen after climbing to 111.665 overnight, its highest since July 27.

The euro was 0.05 percent higher at $1.1962.

The kiwi soared to a one and a half month high of $0.7435 on Wednesday after a poll showed New Zealand's ruling National Party pulled ahead of the rival Labour Party ahead of a general election this weekend. Hong Kong's Hang Seng fell almost 0.4 percent to 28,051.41, while the Shanghai Composite dipped 0.2 percent to 3,356.84.

South Korean shares dipped 0.1 percent, against a backdrop of caution ahead of the Fed meeting as well as continuing tensions on the Korean peninsula. It has gained 0.3 percent on the week.

They've cut their estimate of the longer term neutral interest rate, where monetary policy is neither expansionary nor contractionary, from 3% to just below 2.8%. MSCI's gauge of stocks across the globe gained 0.14 percent and hit another record high.

US crude CLcv1 fell 43 cents to settle at $49.48 a barrel, while Brent LCOcv1 declined 34 cents to settle at $55.14. Brent crude futures rose 14 cents, or 0.3 percent, to end at $56.43 a barrel.

Gold for December delivery closed down less than 0.1% at $1,310.60 a troy ounce on the Comex division of the New York Mercantile Exchange.