Published on : Sep 10, 2014
Asian shares observed a steep decline on Wednesday amid fears that the Federal Reserve would increase interest rates earlier than expected, leading the dollar to jump to its 14-months high against major currencies.
Some regional tech shares observed a hit after stocks of Apple Inc fell as the initial excitement about the launch of new products evaporated quickly.
Japan stock index Nikkei observed a drop by 0.4% and ended at .N225while MSCI’s index of Asia-Pacific (Japan not included), slipped by 1.1%. If the declines sustain, they would mark the largest drop for the regional index in the past six months.
On Wall Street, Apple Inc.’s shares declined and stocks were pushed down due to higher bond yields.
However, the dollar traded at a good rate after economic experts at the Federal Reserve, San Francisco, stunned markets by publishing a report that said that the investors expect a slower rate hike than what the U.S. policymakers expect.
Predictably, the report leveraged expectations that the Fed could indicate an earlier hike in rate at their upcoming policy-talks on September 16-17.
Senior strategist at SMBC Nikko Securities, Makoto Noji, stated that the market has become overly content about lower rates from the Fed for a long time because of Ukraine crisis and so on.
Dollar rose as high as 84.519 against a basket of major currencies on Tuesday, not too far from the highest rate recorded 84.753 in July 2013. It ended up valuing 84.136 on the same day.
On Tuesday, gold prices observed a hit that recorded a three-month low of $1,247.15 per ounce with rise in dollar.