* Investors watching for signs of faster policy normalization
* Fed is likely to make rosier forecasts, but no policy change is expected
* BOE, BOJ policy decisions also this week
TOKYO / NEW YORK, March 17 (Reuters) – Asian stocks fell Wednesday, followed Wall Street, as investors waited to see if the US Federal Reserve would signal a faster path to policy normalization than previously expected.
The Federal Open Market Committee (FOMC) of the US central bank will conclude a two-day meeting later in the day.
An index of regional stocks excluding Japan fell 0.3%, led by declines in the South Korean Kospi and the Australian S & P / ASX 200.
The Shanghai Composite Index fell 0.4% and Hong Kong’s Hang Seng fell 0.2%.
Japan’s Nikkei 225 went against the trend to add 0.1%, but the broader Topix index was flat to slightly lower.
Global markets have turned in recent weeks due to a defeat in Treasury bills that saw benchmark returns rise to a more than a year high as bond investors bet accelerating COVID-19 vaccinations and massive fiscal stimulus would spur faster-than-expected growth and inflation in the world’s largest economy.
The volatility has fueled speculation that the Fed might be forced to make a technical adjustment of the levers controlling its policy rate, but few expect the central bank to take action at this week’s meeting, even as it releases brighter growth forecasts.
“We expect (Chairman Jerome) Powell to note that the FOMC has the tools to intervene if the bond market becomes disordered or impedes economic recovery,” wrote analysts from the Commonwealth Bank of Australia.
“But we expect Powell to push back against talk of policy tightening because of the great slack in the labor market.”
“US bond yields and the USD could rise if the FOMC’s post-meeting statement and Powell’s statement are not considered moderate enough.”
The benchmark 10-year Treasury yield continued to consolidate at around 1.6%, reaching 1.6197% in Asia on Wednesday. They hit 1.6420% on Friday for the first time since February last year.
An index tracking the dollar against six major peers was held at around 91.90 after pulling back from the three-month high of 92,506 reached last week.
Forex market caution could last all week, with the Bank of England announcing its policy decision on Thursday and the Bank of Japan finalizing a policy review on Friday that could phase out a numerical target for buying assets.
On Tuesday, the Dow Jones Industrial Average fell 0.39% to finish at 32,825.95 points, while the S&P 500 lost 0.16% to 3,962.71. The Nasdaq Composite was up 0.09% to 13,471.57.
E-mini futures for the S&P 500 were down 0.04% on Wednesday.
The gold price rose slightly to float at its highest level in more than two weeks on the outlook for higher inflation.
Spot gold was up about 0.2% to $ 1,734.81 an ounce.
Oil prices were lower amid concerns over demand after Germany, France and other European countries discontinued use of the AstraZeneca vaccine, a move that could slow the strength of the region’s economic recovery.
Brent crude futures fell 12 cents to $ 68.27 a barrel and US crude oil futures fell 3 cents to $ 64.77 a barrel.
Reporting by Kevin Buckland; Editing by Kim Coghill