SINGAPORE: Asian stocks fell on Thursday, following a slide on Wall Street, as investors took fright at a warning from the Federal Reserve that the United States faced a grim economic outlook with "significant downside risks".
The dollar gained on the prospect of higher short-term interest rates after the Fed said it would sell $400 billion of short-term Treasury bonds to buy longer-dated debt in a widely predicted move known as "Operation Twist", aimed at stimulating the economy by forcing down long-term borrowing costs.
But was the central bank's gloomy assessment of the world's biggest economy that caught investors' eyes, with oil and copper falling alongside stocks on fears of weakening demand.
Japan's Nikkei fell 1.3 percent, while MSCI's broadest index of Asia Pacific shares outside Japan dropped 1.7 percent, putting it 22.7 percent below its 2011 high in April.
"Operation Twist" is the latest in a series of steps aimed at reviving an economy that has struggled to rebound from the 2008 financial crisis.
But investors worry that the Fed's latest plan will have little effect on lending in an economy that appears to be stagnating, which the Fed also noted.
U.S. stocks suffered their worst one-day drop in a month after the central bank wrapped up its two-day policy meeting on Wednesday, with the S&P 500 index falling nearly 3 percent.
The dollar rose broadly, with the dollar index , which measures the greenback against a basket of major currencies, gaining 0.6 percent.
The euro was down a little around $1.3564, extending Wednesday's losses, and the Australian and New Zealand dollars also fell.
Oil and copper, both sensitive to expectations of industrial demand, also slipped further.
Brent crude was down 1.6 percent at $108.55 a barrel and U.S. crude lost 1.8 percent to $84.34. Copper dropped 1.6 percent to $8,170.75 a tonne. ' Reuters
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The dollar gained on the prospect of higher short-term interest rates after the Fed said it would sell $400 billion of short-term Treasury bonds to buy longer-dated debt in a widely predicted move known as "Operation Twist", aimed at stimulating the economy by forcing down long-term borrowing costs.
But was the central bank's gloomy assessment of the world's biggest economy that caught investors' eyes, with oil and copper falling alongside stocks on fears of weakening demand.
Japan's Nikkei fell 1.3 percent, while MSCI's broadest index of Asia Pacific shares outside Japan dropped 1.7 percent, putting it 22.7 percent below its 2011 high in April.
"Operation Twist" is the latest in a series of steps aimed at reviving an economy that has struggled to rebound from the 2008 financial crisis.
But investors worry that the Fed's latest plan will have little effect on lending in an economy that appears to be stagnating, which the Fed also noted.
U.S. stocks suffered their worst one-day drop in a month after the central bank wrapped up its two-day policy meeting on Wednesday, with the S&P 500 index falling nearly 3 percent.
The dollar rose broadly, with the dollar index , which measures the greenback against a basket of major currencies, gaining 0.6 percent.
The euro was down a little around $1.3564, extending Wednesday's losses, and the Australian and New Zealand dollars also fell.
Oil and copper, both sensitive to expectations of industrial demand, also slipped further.
Brent crude was down 1.6 percent at $108.55 a barrel and U.S. crude lost 1.8 percent to $84.34. Copper dropped 1.6 percent to $8,170.75 a tonne. ' Reuters
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