Tokyo: Asian stocks stumbled and the dollar stood tall on Thursday after minutes from the US Federal Reserve`s October meeting hinted at stimulus tapering, while the euro was pressured by speculation of more easing by the European Central Bank.
Stocks dropped on talk of the Fed`s stimulus withdrawal, with MSCI`s broadest index of Asia-Pacific shares outside Japan and Australia`s S&P/ASX 200 index both shedding about 0.3 percent.
Federal Reserve officials indicated at the bank`s October 29-30 policy meeting that they could decide to start scaling back the asset purchases at one of its next few meetings provided this was warranted by economic growth.
"The headline that most participants saw tapering in the next couple of meetings cannot be much of surprise, since the alternative is a virtual indefinite postponement," said Steven Englander, global head of G10 FX strategy at CitiFX.
"That said, the 5 percent probability associated with a December tapering seemed too low so there may have been an unwinding of somewhat overly dovish expectations," Englander wrote in a note to clients.
The dollar index, which tracks the greenback against a basket of major currencies, last stood at 81.032 after climbed 0.4 percent on Wednesday in its biggest one-day gain in about two weeks.
The euro was slightly lower at USD1.3435, and was also buying 143.40 yen, well off a four-year high of 135.94 yen touched on Wednesday.
The dollar was a touch firmer against its Japanese counterpart, buying 100.13 yen.
The euro plunged on Wednesday after a Bloomberg report said the ECB was considering cutting its deposit rate, one of its two key interest rates, to below zero. An ECB spokesperson declined to comment on the report.
First Published: Thursday, November 21, 2013, 09:39