Asian stocks fell a second day after Federal Reserve minutes showed some U.S. policy makers were concerned about low inflation. Shares in Japan gained as the yen weakened past 118 per dollar.
The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 139.54 as of 9:04 a.m. in Tokyo after dropping 0.7 percent yesterday. Many Fed officials saw a need to remain attentive to signs of a drop in inflation expectations, according to minutes of the Fed’s October review released yesterday. Data showed Japan’s trade deficit narrowed after exports gained 9.6 percent last month from the previous year, the biggest gain in eight months. The yen slid 0.2 percent to 118.15 per dollar, trading near its lowest since August 2007.
“The Fed surprised everybody with the hint that they were watching deflation,” Kirk Hartman, president and chief investment officer of Wells Capital Management in Los Angeles, said on Bloomberg Television. “To me, the Fed is still steady as she goes and I think next week the story will be that there are no imminent rate hikes until late 2015.”
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