Asia Stocks Drop as Yen Gains; Oil Rises

Asian stocks moved lower while the yen strengthened amid signs that Federal Reserve officials have split opinions on policy strategy.

Equities from Japan to Singapore registered declines, with Chinese shares traded in Hong Kong showing the biggest losses. The S&P 500 Index posted small gains Wednesday and technology shares boosted the Nasdaq 100. The yen climbed against all its major peers. Oil recovered some losses after slumping toward $45 a barrel, as data showed U.S. crude and gasoline stockpiles declined.

Minutes from the Fed’s most recent meeting showed a lack of consensus about when to shrink the central bank’s balance sheet and how to approach policy strategy in a time of low inflation. The officials continued to view gradual interest-rate increases as appropriate, while starting the process of unwinding their $4.5 trillion balance sheet this year.

Geopolitical risk remains on investors’ minds as Kim Jong Un’s test of an intercontinental ballistic missile capable of striking the U.S. mainland sparked an emergency meeting at the United Nations Security Council. Despite brief flurries of risk aversion, money managers aren’t showing signs of undue worry in reaction to North Korea’s provocations.

These are the main moves in markets:

Stocks

· Japan’s Topix dropped 0.3 percent as of 1:22 p.m. in Tokyo. South Korea’s Kospi fell 0.2 percent and Singapore’s Straits Times Index dropped 0.3 percent.

· Hong Kong’s Hang Seng Index fell 0.3 percent, while the Hang Seng China Enterprises Index retreated 0.7 percent. The Shanghai Composite Index was down 0.3 percent.

· Futures on the S&P 500 Index declined less than 0.1 percent after the underlying gauge rose 0.2 percent Wednesday. The Nasdaq 100 index jumped 0.9 percent and the Stoxx Europe 600 Index rose 0.2 percent.

Currencies

· The yen climbed 0.3 percent to 112.98 per dollar. The New Zealand dollar slipped 0.2 percent while the Australian dollar fell less than 0.1 percent.

· The Bloomberg Dollar Spot Index was little changed, after Wednesday’s 0.1 percent gain.

Bonds

· The yield on 10-year Treasuries was little changed at 2.32 percent, after falling three basis points Wednesday.

· Australia’s benchmark yield was flat at 2.63 percent.

Commodities

· West Texas Intermediate crude futures rose 0.8 percent to $45.47 a barrel, paring an earlier gain of as much as 1.4 percent. The contract dropped 4.1 percent Wednesday, the most in four weeks, as Russia was said to oppose any proposal to deepen OPEC-led production cuts.

· Gold was flat at $1,227.05 an ounce, after two days of gains.

Source: Bloomberg

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