HONG KONG, Nov 17 (Reuters) – The dollar reached a four-and-a-half-year high against the yen on Wednesday after better-than-expected U.S. retail data, which also boosted Wall Street equities, although Asian shares failed to follow suit.<\/p>\n
MSCI\u2019s broadest index of Asia-Pacific shares outside Japan slipped 0.45% edging off Tuesday\u2019s near three-week closing high, with declines in most markets, while Japan\u2019s Nikkei lost 0.4%.<\/p>\n
The dollar reached a high of 114.97 yen in early Asian hours, its strongest since March 2017, while the euro languished at a 16-month low at $1.1320.<\/p>\n
The greenback was helped by Tuesday data which showed U.S. retail sales rose faster-than-expected in October, potentially encouraging the U.S. Federal Reserve to accelerate the tapering of its asset purchase programme, as inflation remains stubbornly high.<\/p>\n
\u201cThe data backs up that sense that things are going pretty well, and the Fed can be a little more aggressive if it wants to be without completely causing the party to crash,\u201d said Rob Carnell, head of research for Asia Pacific at ING.<\/p>\n
\u201cTop of mind for everyone is inflation right now, it\u2019s still an issue after the numbers we got from the U.S. yesterday, and we\u2019ve got a whole barrage of other inflation data coming today, particularly the U.K and Canada,\u201d he added.<\/p>\n
Britain publishes its October CPI inflation data later today with a high print likely to add pressure on the Bank of England to raise rates in December after surprising markets by holding fire last month.<\/p>\n
\u201cWhat it\u2019s not about is the Biden-Xi summit, which had the potential to do damage but seems not to have done so,\u201d Carnell added.<\/p>\n
At a three hour meeting on Tuesday, U.S. president Joe Biden and Chinese leader Xi Jinping turned down some of the heat in Sino-U.S. tensions, though both sides held to their entrenched positions on a range of issues.<\/p>\n
The positive tone offered a slight boost to Asian shares on Tuesday, but this proved short lived.<\/p>\n
On Wednesday, the Hong Kong benchmark slipped 0.4%, weighed by property developers and casinos as traders bet a recent rebound in both sectors had gone too far. Chinese blue chips were flat.<\/p>\n
Australian shares slipped 0.5%, weighed by Commonwealth Bank of Australia, the country\u2019s largest bank, whose shares slipped 6% after it flagged hit to margins from the low interest rate environment and mortgage competition.<\/p>\n
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.15%, the S&P 500 gained 0.39% and the Nasdaq Composite was up 0.76%, supported by the retail sales figures.<\/p>\n
These also provided a boost to U.S. Treasuries and benchmark 10-year note yields reached as high as 1.646% in early Asia, a three-week high.<\/p>\n
U.S. crude dipped 0.66% to $80.25 a barrel. Brent crude fell 0.5% to $82.03 per barrel.<\/p>\n
Spot gold rose 0.25% to $1,854 an ounce, climbing back towards the five-month high of $1,876.9 hit a day earlier on rising inflation concerns.<\/p>\n
Rival inflation hedge bitcoin was steady at $60,240 having shed 5% a day earlier and briefly falling below $60,000.<\/p>\n