The Asian stock market was seen in red as stocks closed lower on Wednesday, while investors raise concerns over the Fed‘s speculation on tapering the asset-purchasing program. The Japanese yen advanced for the fourth day as stocks declined; while the country’s central bank policymakers are due to begin a meeting later today.
A couple of disappointing regional data reports was released as Japan was hit by the strong yen. The weak performance in Asia reflected on the development on US stocks, while Wall Street was seen declining for the second day in a row.
The Japanese benchmark Nikkei 225 dropped 4.00% closing at 13,824.94 lower than the previous session, while the broader Topix fell 2.73% to 1,161.05.
Hong Kong’s Hang Seng edged down 0.92% to 21,721.87 at the time of writing , while the Chinese Shanghai composite sank 0.25% to 2,055.31.
The South Korean Kospi index declined 1.48% to 1,878.33, while the Australian S&P/ASX 200 fell by 1.88% to close at 5,009.40.
The Bank of Japan (BoJ) is expected to begin its two-day meeting later in the day, with predictions that the bank’s policymakers would begin to taper its quantitative and qualitative easing (QQE) in August while Japan’s inflation rate remain unchanged below the bank’s 2% target .
Analysts are expecting the Bank of Japan (BoJ) to include its stimulus program and expand it its record QQE by June 2013.
Meanwhile, Dallas Fed President Richard Fisher stated on Monday that the Federal Reserve is likely to start tapering its asset-purchasing program sooner than expected.
“Some have come to expect the Fed to keep the markets levitating indefinitely. This distorts the pricing of financial assets and can lead to serious misallocation of capital,” Dallas Fed President Richard Fisher said on Monday.
“With the unemployment rate having come down to 7.4%, I would say that the Committee is now closer to execution mode, pondering the right time to begin reducing its purchases, assuming there is no intervening reversal in economic momentum in coming months,” he added .
However, according to the Fed Chairman Ben Bernanke, QE will remain the same until the US economy shows further improvement.
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