Asian shares, currencies fall on Fed tapering concerns
2013/11/11TOKYO (Reuters) - Asian shares fell to a four-week low on Monday as a surprise surge in U.S. jobs growth heightened expectations the Federal Reserve will start reducing stimulus by year-end, boosting the dollar against the euro, yen and emerging currencies.
Adding to that concern, China's annual inflation climbed to an eight-month high in October, fuelling market worries about policy tightening as factory output and investment data pointed to signs of stabilization in the world's second-largest economy.
"Against the backdrop of steady growth, runaway property prices, particularly in tier one cities, is an area of concern and may trigger policy actions," analysts at BNP Paribas wrote in a note.
China's CSI300 Index <.CSI300> fell 0.5 percent, touching a 2-1/2 month low.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> slipped 0.2 percent, hitting its lowest since October 11 and extending Friday's 1 percent drop.
Indonesian shares (.JKSE) shed 0.7 percent, while the Indonesian rupiah fell 0.7 to 11,485 per dollar, hitting a one-month low.
Other emerging currencies also suffered, with Thai baht off 0.7 percent to 31.61 to a dollar to a seven-week trough and down 0.4 percent to 43.39, a one-month low.
U.S. employers took on 204,000 new employees last month, almost twice the number forecast by analysts and defying expectations that the partial U.S. government shutdown would hamper job growth.
The strong data raised the prospect the Federal Reserve may soon decide to start winding down its $85 billion-a-month bond-buying program.
Fed Chairman Ben Bernanke and two other top policymakers suggested continued support for the U.S. central bank's massive stimulus campaign, however.
A hedge fund manager said it was unlikely that the Fed will start reducing stimulus by year-end.
"If people get concerned about rates in the U.S. moving higher and QE ending sooner, obviously that will have an impact. But I don't think it's going to happen anytime soon," he said.
"I just think they wouldn't do anything before the end of the year because of the impact on sentiment and consumption. I think it's too early to talk about it."
DOLLAR UP, NIKKEI ADVANCES
The dollar was steady at 99.01 yen, not far from a seven-week high of 99.41 yen reached last Thursday, and up 0.1 percent at $1.3358 to the euro, having gained 0.4 percent on Friday.
Against a basket of major currencies, the dollar (.DXY) stood at 81.259, not far from a two-month high of 81.482 touched on Friday.
As the yen weakened, Japan's Nikkei benchmark (NIK:^9452) climbed 1.3 percent in relatively light trade after losing 0.8 percent last week.
U.S. S&P E-mini futures dipped 0.1 percent after the Standard & Poor's 500 index (.SPX) climbed 1.3 percent on Friday.
U.S. Treasury futures were steady after the 10-year U.S. Treasury yield rose as much as 15 basis points to a four-week high of 2.763 percent on Friday.
Gold slipped 0.1 percent to about $1,286 an ounce, adding to Friday's 1.5 percent decline and languishing near a three-week low on worries that the Fed will soon remove its support for the economy.
Brent crude prices rose 0.3 percent to around $105.5 a barrel, building on Friday's 1.6 percent rise, which broke a three-day run of losses and rebounded from a four-month trough.
