Asian Stocks Fall as Geopolitics, Fed Risks Mulled

Asian stocks declined as investors digested the latest signals from the Federal Reserve on the monetary-policy outlook, escalating tensions in the Middle East and a fractious U.S. political landscape. The dollar edged higher and Treasuries were little changed.

Equity benchmarks headed lower in Japan, China and Hong Kong, while oil extended Wednesday’s gains. The S&P 500 Index retreated overnight amid provocative comments by President Donald Trump about Russia and his warning of preparations to attack Syria. Hong Kong’s dollar fell to the weak end of its permitted band for the first time since the range was imposed in 2005, putting potential intervention by the city’s monetary authority in focus. The Korean won declined after the central bank trimmed its inflation projections.

Geopolitics and minutes of last month’s Fed policy meeting overshadowed the latest reading on U.S. consumer prices. The key inflation measure accelerated to the highest in a year as a drag from mobile-phone costs faded, bearing out the Fed’s forecast for a pickup in prices. Next up is earnings season: JPMorgan Chase & Co. and Citigroup Inc. report first-quarter earnings on Friday. A gauge of global earnings revisions showed cuts to company estimates outnumbered upgrades for the first time since September last week.

Elsewhere, Russia’s currency slumped to a 16-month low and the country’s Finance Ministry canceled a weekly bond auction for the first time since 2015 as the Syria conflict added to stresses from recent U.S. sanctions. Copper retreated and aluminum pulled back after a six-day rally that took it close to a six-year high.

Here are the main moves in markets:

Stocks

The MSCI Asia Pacific Index decreased 0.4 percent as of 1:50 p.m. Tokyo time.

Topix index sank 0.4 percent.

Hong Kong’s Hang Seng Index fell 0.2 percent.

Kospi index rose 0.2 percent.

Australia’s S&P/ASX 200 Index fell 0.3 percent.

Futures on the S&P 500 Index rose 0.2 percent.

Currencies

The Bloomberg Dollar Spot Index rose 0.1 percent.

The Japanese yen fell 0.1 percent to 106.91 per dollar.

The euro fell 0.1 percent to $1.2358.

Bonds

The yield on 10-year Treasuries fell less than one basis point to 2.78 percent.

Japan’s 10-year yield fell less than one basis point to 0.033 percent.

Australia’s 10-year yield fell less than one basis point to 2.678 percent.

Commodities

West Texas Intermediate crude rose 0.4 percent to $67.10 a barrel.

Gold fell 0.3 percent to $1,349.26 an ounce.

LME copper sank 1.4 percent to $6,854.50 per metric ton.

Sources: Bloomberg