TOKYO Asian shares slipped in early trade on Tuesday, pressured by losses on Wall Street against a backdrop of slumping crude oil prices and mixed messages on the outlook for U.S. monetary policy.
Oil prices nursed losses after shedding more than 2 percent overnight, which brought Brent to one-month lows, as investors doubted that oil producing countries would freeze output to address a global glut.
Brent LCOc1 skidded 0.5 percent to $37.51 a barrel after losing 2.5 percent on Monday. U.S. crude CLc1 lost nearly 3 percent overnight, and on Tuesday was down about 0.7 percent at $35.45.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.3 percent, after commodity-related and industrial shares helped drag down U.S. stock indexes overnight.
Japan's Nikkei stock index .N225 dropped 0.7 percent, as the dollar wallowed around two-week lows against the yen.
U.S. economic data on Monday suggested that economic growth remained sluggish in the first quarter. New orders for manufactured goods dropped in February, as they have for 14 of the past 19 months, while business spending on capital goods was much weaker than initially believed.
That gave investors no reason to believe the U.S. Federal Reserve would raise interest rates anytime soon, in line with the cautious tone Fed chair Janet Yellen sounded last week that contrasted with more hawkish remarks from other central bank policymakers.
Boston Fed Reserve President Eric Rosengren was the latest to fly into the hawkish zone on Monday, calling it "surprising" that futures markets currently price in just one or even no rate hikes this year, which he said could prove "too pessimistic."
"Rosengren is usually on the dovish side of the spectrum, highlighting how out of line Fed chair Yellen sounded last week compared to her colleagues," Sean Callow, senior currency strategist at Westpac, said in a note.
Minneapolis Fed President Neel Kashkari said on Monday he is "comfortable" with the current stance of U.S. monetary policy, and expects "moderate" economic growth ahead.
Against the yen, the dollar shed about 0.2 percent to 111.13 JPY=, after retracing the overnight low of 111.10.
The euro was steady at $1.1390 EUR=, within sight of Thursday's 5-1/2 month peak of $1.1438.
The Australian dollar edged down about 0.1 percent to $0.7595, as investors awaited the outcome of the Reserve Bank of Australia's latest policy meeting, expected at 0430 GMT. [AU/INT]
The RBA is widely expected to keep its cash rate at a record low 2 percent, where it has stood since May last year. Subdued retail sales and inflation data on Monday suggested the central bank might consider cutting rates in the months ahead.
(Editing by Shri Navaratnam)
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First Published On : Apr 5, 2016 06:45 IST