BANGKOK (AP) — Asian stock markets fell Wednesday as signs the U.S. Federal Reserve might scale back its super-loose monetary policy caused investors to trim equity investments.
Comments from Fed official Esther George, who said Tuesday she supported slowing the pace of Fed bond purchases "as an appropriate next step," raised expectations that the central bank might start winding down its aggressive purchases of government bonds.
The Fed's program is a big plus for stock markets: Some $85 billion a month in purchases have helped keep interest rates low and caused investors to shift out of bonds and into stocks.
"People are afraid that the Fed will start to withdraw from the market soon," said Francis Lun, chief economist at GE Oriental Financial Group in Hong Kong. "The flood of liquidity will start to dry up. Then the money will start to flow out of Asia. That is the fear."
Japan's Nikkei 225 index tumbled 1.8 percent to 13,295.89, registering disappointment with a lack of detail in Prime Minister Shinzo Abe's unveiling of the third plank of his so-called Abenomics program intended to rouse a long-stagnant economy.
Hong Kong's Hang Seng lost 1 percent 22,048.84. South Korea's Kospi fell 1.1 percent to 1,968.52. Australia's S&P/ASX 200 dropped 1 percent. Benchmarks in Singapore, Indonesia, Thailand and the Philippines fell. Mainland Chinese shares were mixed.
Australian banking shares fell amid a sell-off spurred by profit-taking, analysts said. Australia & New Zealand Banking Group fell 1.6 percent. Westpac Banking Corp. lost 2.3 percent. Japanese vehicle exporters withered under a strengthening yen, which raises the prices of products sold overseas. Mitsubishi Motors Corp. sank 4.5 percent. Yamaha Motor Co. was 4.7 percent down.
