Global Markets: Asian shares drop on Fed minutes, dollar extends gain
Minutes from the Fed's December policy meeting released on Thursday showed some voting members of the Federal Open Market Committee were increasingly concerned about the potential risks of the Fed's asset purchases on financial markets, even if it
look set to continue an open-ended stimulus program for now.
The Fed's asset buying policy has been a crucial factor underpinning investor risk appetite and supporting global equities, so the more hawkish Fed minutes unnerved financial markets on Thursday, driving benchmark U.S. Treasury yields up to a near eight-month high and weighing on equities and oil, while bolstering the dollar.
The dollar extended gains early in Asia on Friday, hitting its highest since July 2010 against the yen at 87.78 while the euro fell to a three-week low of $1.3022. The U.S. dollar hit a near four-week high against a basket of major currencies on Thursday. "The minutes have added a fresh degree of uncertainty into the investment climate, which is likely to mean a steeper yield curve. But equity investors should take heart from the fact that the Fed's perception is qualified on an improving economy,"
Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York, said in a note to clients. MSCI's broadest index of Asia-Pacific
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