TOKYO: Asian shares went modestly higher while the dollar remained steady on Tuesday, as investors awaited the outcome of the US Fed meeting for clues to the direction of US interest rates.
MSCI’s broadest index of Asia-Pacific shares outside Japan shrugged off early losses and a lackluster performance on Wall Street to rise about 0.3 percent.
But Japan’s Nikkei stock average extended losses, shedding 0.8 percent on concerns over corporate earnings after disappointing results from Canon Inc, despite upbeat economic data released before the market open.
Japanese retail sales in September rose 2.3 percent from a year earlier, government data showed, suggesting consumer spending is gradually picking up.
“Positive retail data is helping some retail stocks, but not strong enough to affect the whole market as investors are focused on the big overseas event now,” said Takuya Takahashi, a strategist at Daiwa Securities.
The Fed is expected to announce the completion of its quantitative easing program and will likely reinforce its stated willingness to wait a long while before hiking interest rates after a volatile month in financial markets. “With the end of the asset purchase program a foregone conclusion, speculation is once again mounting about the movement of interest rates,” said Evan Lucas, market strategist at IG.
Data on Monday showed U.S. services sector activity slowed in October to a six-month low, while manufacturing output in Texas decreased, providing more evidence that the Fed has reason to wait before raising U.S. interest rates.
The U.S. dollar steadied after slipping overnight on expectations of more dovish comments from the Fed.
The dollar index which tracks the U.S. unit against six major rivals, was steady at 85.502.
The dollar was flat on the day against its Japanese counterpart at 107.81 yen , but remained below Monday’s nearly three-week high of 108.38.
The greenback inched up about 0.1 percent against the euro to $1.2711.
