By Gina Lee
Investing.com – Asian stocks were down on Thursday, coming under pressure as the lack of details in the U.S. Federal Reserve’s latest minutes and simmering U.S.-China tensions damped investor sentiment.
The minutes, released on Wednesday, caused U.S. markets to pause a rally as investors digested their lack of guidance. Although the minutes stated, “with regard to the outlook for monetary policy beyond this meeting, a number of participants noted that providing greater clarity regarding the likely path of the target range for the federal funds rate would be appropriate at some point,” no further details were given.
But the pace of U.S. economic recovery is more likely to be worrying officials at present, “given the stalemate on fiscal stimulus in Washington,” Marvin Loh, senior global macro strategist at State Street (NYSE:), told Bloomberg, referring to the stalemate in the U.S. Congress over the latest stimulus measures.
“The Fed will continue to do what it can, but it does feel that fiscal is as important in the recovery process as monetary, and their tools to get funds to Main Street remain constrained,” he added.
Investors will be seeing whether the Fed will provide any further guidance at either the Jackson Hole symposium, due to take place from August 27-28, or at its next meeting in September.
The U.S. threw the latest salvo into mounting tensions with China on Wednesday, when it suspended its extradition treaty and reciprocal tax treatment agreement with Hong Kong.
The suspended agreements cover “the surrender of fugitive offenders, the transfer of sentenced persons, and reciprocal tax exemptions on income derived from the international operation of ships,” State Department spokeswoman Morgan Ortagus said.
Other potential U.S. moves include sanctions against senior management at some of the city’s banks and further limits on the technology that Hong Kong companies can purchase from the U.S.
Hong Kong’s slid 2.14% by 10:38 PM ET (3:38 AM GMT).
China’s fell 1.18% and the was down 0.62%. The People’s Bank of China kept its unchanged, with the one-year loan prime rate at 3.85%, and the five-year loan prime rate at 4.65%.
Japan’s was down 1.12% and South Korea’s slid 2.75%. Korea reported 288 cases as of midnight on Wednesday, with the country struggling to curb an outbreak in Seoul.
Down Under, the was down 1.06%.
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