TOKYO (Reuters) – Asian shares were flat on Wednesday and the dollar held onto some slight gains as market momentum stalled ahead of the outcome of the U.S. Federal Reserve policy meeting and release of U.S. GDP data.
The dollar was steady against a basket of major currencies after a 0.2 percent rise on Tuesday. The dollar index is down 1.6 percent in July and set to post a second straight monthly loss for the first time since the turn of the year.
The dollar index hit a five-week trough earlier this week as investors bet the Fed would reassure markets that interest rates would remain low for a long time even if it started scaling back stimulus this year.
The Fed will release its post-meeting statement at 1800 GMT (7 p.m. British time), but there will no news conference by Chairman Ben Bernanke.
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“Traders globally seem to be in a wait-and-see mode before the outcome of the Fed’s meeting on the timing of quantitative easing tapering,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management in Tokyo.
The Fed is expected to link the start of any tapering to data signals, and markets have two major reports this week.
GDP data on Wednesday is expected to show growth slowed to an annualised pace of 1.0 percent in the second quarter from 1.8 percent in the first, while payrolls data on Friday is forecast to show a fall in the jobless rate.
The European Central Bank and the Bank of England meet on Thursday, and are set to hold policy steady.
SHARES SLIP
The yen slipped 0.1 percent to 97.86 yen to the dollar, while the euro was steady at $1.32670 after hitting a six-week high of $1.33025 on Tuesday.
Asian shares as measured by the MSCI Asia-Pacific ex-Japan index dipped 0.1 percent. The index is up 2.5 percent so far this month, on track to end a two-month losing run, though it is still down 4.9 percent so far this year.
Japan’s Nikkei share average dropped 1.4 percent, however, reversing the previous session’s 1.5 percent gain. Still, the benchmark is up 31 percent in 2013.
Of the 54 Nikkei companies that have reported quarterly earnings so far, two-thirds either beat or met market expectations, according to Thomson Reuters StarMine, versus 54 percent in the previous quarter.
But in a sign that companies are curbing production due to slowing growth in exports, Japanese manufacturing activity in July grew at the slowest pace in four months.
In commodity markets, copper prices steadied near three-week lows around $6,730 a tonne after dropping 2.1 on Tuesday on concerns about demand in top consumer China
A Reuters poll found Chinese manufacturing activity may have contracted in July for the first time in 10 months, signalling a protracted slowdown in the world’s second-largest economy.
Gold was little changed above $1,300 an ounce. The yellow metal is up 7.6 percent so far this month, on track to snap a three-month losing run, but it is down 21 percent since the beginning of the 2013.
Brent crude prices dipped 0.1 percent to just below $106.80 a barrel, extending a 0.6 percent decline on Tuesday.
(Additional reporting by Ian Chua in SYDNEY and Tomo Uetake in TOKYO; Editing by John Mair)
Source: Reuters
