Asian stocks step back as investors brace for Fed

TOKYO (Reuters) – Asian shares slipped back on Wednesday as investors looked to the Federal Reserve policy decision later in the day and any clues it might give on future rate hikes, shifting focus away from the historic U.S.-North Korea summit in Singapore.

FILE PHOTO: A man walks past electronic boards showing Japan’s Nikkei average (L), the Dow Jones Industrial Average (2nd L) and foreign exchange rates outside a brokerage at a business district in Tokyo, Japan August 9, 2017. REUTERS/Kim Kyung-Hoon

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.5 percent, erasing the slim gains they made following Tuesday’s meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un.

Trade frictions between the United States and China are also back on radar ahead of Friday, by when Washington has said it will release a list of some $50 billion worth of Chinese goods that will be subject to a 25 percent tariff.

“For Asian markets, tariffs will be the biggest concerns in the near term,” said Yukino Yamada, senior strategist at Daiwa Securities.

Japan’s Nikkei .N225 eked out gains of 0.25 percent, following the 0.17 percent gains in the U.S. S&P 500 <.SPX > the previous day.

On Wall Street, technology shares continued to lead the rally, with the Nasdaq Composite .IXIC adding 0.57 percent to finish at record high of 7,703.

With the U.S.-North Korea summit out of the way, market focus is quickly shifting to the Fed’s two-day policy meeting ending on Wednesday.

The Fed is widely expected to raise interest rates for the second time this year after a move in March, but the bigger question for investors is the outlook for future monetary tightening amid an ongoing economic expansion.

“With a rate hike almost fully priced in, the focus is on

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