Tokyo: Asian stocks stalled on Friday as Federal Reserve-inspired gains petered out, while the dollar steadied after rebounding from the shock of a surprisingly dovish U.S. central bank.
MSCI`s broadest index of Asia-Pacific shares outside Japan was little changed after rallying 1.3 percent the previous day. But it still looked set for a gain of around 2.4 percent for the week.
In a mixed day for the region, shares in Hong Kong, Malaysia and South Korea slipped while their Australian and Chinese counterparts rose.
Japan`s Nikkei was flat, taking a breather after a strong rally since February that took it to a 15-year high.
"There are some signs the rally had got overheated. So the market is in a correction phase," said Masahiro Ayukai, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
U.S. shares fell overnight as the dollar`s rebound dragged down oil and other commodity prices, sending energy and material sectors lower.
"Crude oil is falling again and if U.S. equities remain unstable amid differing prospects for a Fed rate hike, it will weigh on global equities," said Junichi Ishikawa, market analyst at IG Securities in Tokyo.
The dollar tumbled across the board, risky assets surged and U.S. debt yields sank after the Fed on Wednesday opened the door further for an interest rate hike but signalled a more cautious outlook for U.S. growth, cooling speculation for tightening in June.
The dollar was little changed at 120.75 yen after sinking to the week`s low of 119.29 after the Fed`s statement.
Helping the greenback was higher U.S. Treasury yields, which on Thursday bounced modestly from multi-week lows hit on the Fed`s dovish-sounding statement. The 10-year Treasury note yielded 1.958 percent after sinking to a five-week trough of 1.899 percent overnight.
The euro edged up 0.2 percent to $1.0687. The common currency had posted its biggest one-day gain in six years against the dollar and climbed a peak of $1.1062 after the Fed.
Greece promised on Friday to speed up implementation of its extended bailout agreement and send a full list of detailed reform proposals to its euro zone partners in the coming days, German Chancellor Angela Merkel said.
However, she declined to set any date for releasing any further aid to the Greek government, which is rapidly running out of cash.
The dollar index was down 0.4 percent at 98.884 but still well above a low of 96.628 plumbed midweek.
In commodities, U.S. crude oil was down 0.2 percent at $43.88 a barrel after taking a knock overnight on the dollar`s bounce and Kuwait`s stance that OPEC had no option but to keep producing in an oversupplied market.
U.S. crude has dropped to a six-year low of $42.03 a barrel earlier in the week.
