Asian shares hit by Fed taper talk

HONG KONG—Asian shares slipped Thursday after minutes from the Federal Reserve’s latest meeting showed it was considering winding down its stimulus “in coming months.”

But Tokyo rallied as the comments sent the dollar surging against the yen.

The regional decline followed losses on Wall Street as another batch of data provided evidence of an uptick in the US economy, fueling fears the Fed’s bond-buying could be nearing its end.

Tokyo climbed 1.92 percent, or 289.52 points, to 15,365.60 as the dollar advanced against the yen, hitting a four-month high at one point.

However, Sydney eased 0.37 percent, or 19.4 points, to 5,288.3 and Seoul fell 1.16 percent, or 23.46 points, to 1,993.78.

Shanghai closed flat, dipping 0.48 points to 2,205.77 after a late rally, while Hong Kong lost 0.51 percent, or 120.57 points, to end at 23,580.29. The two markets faced added selling pressure after HSBC said growth in Chinese manufacturing activity slowed in November.

Minutes from the Fed’s October policy meeting showed board members felt recent economic indicators showed the time was approaching to start cutting down its $85 billion a month bond-buying scheme.

“They generally expected that the data would prove consistent with the committee’s outlook for ongoing improvement in labour market conditions and would thus warrant trimming the pace of purchases in coming months,” the minutes said.

They reiterated that any such move was contingent on a continued strengthening of the US economy, and stressed that even if the programme was ended the bank was looking at other ways to keep short-term interest rates down.

Traders on Wall Street reacted negatively to the remarks, which came as official data showed stronger than expected retail sales in October as well as a pick-up in business hiring.

The Dow fell 0.41 percent, the S&P 500 slipped 0.36 percent and the Nasdaq lost 0.26 percent.

“The view still is that there is a chance the Fed could taper in December,” Michael Woolfolk, senior currency strategist at Bank of New York Mellon, told Dow Jones Newswires.

And Harm Bandholz at UniCredit said: “There can be no doubt that the Federal Reserve is again getting closer to … moderating its asset purchases.”

But he warned: “The key uncertainty for most (policy board) members remains, however, whether this labor market improvement is sustainable.”

Expectations the Fed will be buying fewer bonds sent Treasury yields higher, which in turn boosted the dollar.

In Asian Tokyo trade the greenback climbed to 100.78 yen—its highest since mid-July—compared with 100.03 yen in New York Wednesday.

The euro fetched $1.3401 and 135.07 yen compared with $1.3435 and 134.40 yen.

In China, banking giant HSBC said its preliminary purchasing managers’ index of manufacturing came in at 50.4, down from a final reading of 50.9 in October, which was a seven-month high. A reading above 50 indicates growth, while anything below signals contraction.

The figures—the result of weaker export orders—threw a cloud over prospects for the world’s No. 2  economy.

Citigroup economist Ding Shuang said: “It may indicate the recent rebound has peaked and in the following months we will see slower growth.”

He added that the softer figures were likely to extend through all of next year.

Oil prices were mixed. New York’s main contract, West Texas Intermediate for December delivery, rose 32 cents to $93.65. But Brent North Sea crude for January fell 25 cents to $107.81.

Gold fetched $1,247.52 per ounce at 1114 GMT compared with $1,271.42 on Wednesday.

In other markets:

— Taipei fell 1.28 percent, or 105.01 points, to 8,099.45.

Taiwan Semiconductor Manufacturing Co. dropped 1.94 percent to Tw$101.0 while computer maker Acer rose 1.63 percent to Tw$15.6.

— Manila lost 0.53 percent, or 32.45 points, to end at 6,122.89.

— Wellington slipped 0.45 percent, or 22.00 points, to 4,818.37.

Air New Zealand shed 1.9 percent to NZ$1.54, Ryman Healthcare lost 0.6 percent to NZ$7.79 and Contact Energy was off 0.41 percent at NZ$4.90.

— Jakarta fell 0.56 percent, or 24.58 points, to 4,326.21.

Miner Aneka Tambang gained 2.31 percent to 1,330 rupiah while Bank Permata lost 2.88 percent to 1,350 rupiah.

— Kuala Lumpur fell 0.22 percent, or 4.04 points, to close at 1,794.65.

Plantation company Sime Darby shed 1.4 percent to 9.55 ringgit, while Axiata Group lost 0.5 percent to 6.70.

— Bangkok lost 2.06 percent, or 28.95 points, to 1,375.86.

Airports of Thailand dropped 4.57 percent to 198.50 baht, while telecoms company True Corporation fell 4.47 percent to 8.55 baht

— Singapore share prices fell 0.37 percent, or 11.85 points, to close at 3,172.38.

SingTel was up 0.54 percent at Sg$3.73 while Capitaland was down 0.33 percent at Sg$3.05.

— Mumbai fell 1.97 percent, or 406.08 points, to end at 20,229.05 points

India’s Future Retail fell 8.06 percent to 73.0 rupees and housing finance firm HDFC fell 3.61 percent to 779.4 rupees.