Elsewhere, Hong Kong slipped 0.2 per cent by the close and Singapore was 0.8 per cent off while Seoul ended down 0.2 per cent and Manila dived 1.4 per cent. Sydney, however, added 0.3 per cent, while Shanghai edged up 0.1 per cent after suffering a hefty loss on Wednesday. Germany’s Dax ended Tuesday up 0.49%, France’s CAC 0.15% and London’s FTSE 0.21%.
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Fed policy makers will meet on July 26-27th with traders pricing in 10 per cent odds of a rate rise, while the probability for a move by December rose to 45 per cent from 12 per cent at the beginning of this month.
The strong yen sent Japan’s Nikkei tumbling a day before the country’s central bank winds up its own policy meeting.
“The best-case scenario for the market is that the BoJ decides to increase government debt purchases without cutting interest rates further into negative territory”, said Hikaru Sato, a senior technical analyst at Daiwa Securities in Tokyo.
While most investors expect the Fed to leave its monetary policy unchanged this week, it could give hints on the timing of future rate hikes.
“Near-term risks to the economic outlook have diminished”, the Fed said, adding that there was some increase in labor utilisation in recent months and household spending have grown “strongly”.
But the Fed also noted that inflation expectations were on balance little changed in recent months, and gave no firm indication of whether it would raise rates at its next policy meeting in September.
The Fed’s latest policy statement steered traders to favour longer-dated United States treasuries over shorter-dated issues, pushing the yields on 10-year notes and 30-year bonds to one-and-a-half-week lows as prices rose.
Spot gold hovered near a two-week high of $1,342.18 an ounce touched overnight when it gained 1.4 percent.
The euro, which gained 0.7 percent overnight, edged up to a nine-day high of $1.1075.
The dollar fell 0.58 percent to 104.78 yen.
Spot gold was down 0.1 percent at $1,333.60 an ounce at 1015 GMT, on track for its first weekly gain in three weeks and a near one percent monthly gain.
Higher-yielding currencies also made inroads against the United States unit, with the Australian dollar putting on 0.7 per cent and South Korea’s won 0.9 per cent, while the under-pressure Turkish lira climbed 0.8 per cent. Malaysia’s ringgit added 0.7 per cent and the Indonesian rupiah was 0.2 per cent higher.
As for other precious metals, Comex silver for September delivery fell 6.7 cents or 0.3 percent to $20.125 per ounce.
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TOKYO – Asian stocks were mostly lower on Thursday as Chinese equities deepened their losses, souring risk sentiment that had improved earlier after the Federal Reserve provided a positive assessment of the United States economy.
