Asia shares slip after OECD cuts global growth outlook

HONG KONG (AFP) - Asian markets mostly fell on Wednesday after the OECD cut its forecasts for global growth, citing the likely effect of any wind-down in the Federal Reserve's stimulus programme.

The downbeat mood from the Organisation for Economic Co-operation and Development announcement came despite Fed chief Ben Bernanke saying that the bank would keep its easy money policy in place for as long as needed.

Tokyo was 0.19 per cent lower, Sydney fell 0.85 per cent, Seoul lost 0.89 per cent and Shanghai was down 0.11 per cent while Hong Kong edged up 0.22 per cent.

In a prepared speech Tuesday Bernanke gave no hint as to when the Fed would start reining in its US$85 billion ($S$105 billion) a month bond-buying scheme but said it was "committed to maintaining highly accommodative policies for as long as they are needed".

While the economy had made "significant progress" since the financial crisis, he said "we are still far from where we would like to be, and, consequently, it may be some time before monetary policy returns to more normal settings".

The remarks, at the National Economists Club annual dinner in Washington, were welcomed by traders as the "quantitative easing" (QE) has been credited with supporting global markets since it was introduced last September.

However, while dealers bet on a continuation of US easy money, the OECD warned that uncertainty around the future of the scheme had caused global risk.

In lowering its outlook for global for 2013 and 2014, the organisation said old worries "have been augmented by new concerns, most notably the possibility of significant financial instability in advanced and, especially, (emerging economies) during the exit from unconventional monetary policies in the United States".

Eyes are now on the release later in the day of minutes from the Fed's most recent policy board meeting, with analysts looking for clues about the bank's plans for QE.

On currency markets the dollar fell back below the 100 yen mark as traders await the Fed meeting. The greenback bought 100.00 yen, compared with 100.13 yen in New York Tuesday, while the euro fetched $1.3550 and 135.63 yen, against $1.3535 and 135.53 yen.

And in oil trade New York's main contract, West Texas Intermediate for December delivery, was up 29 cents at $93.63 in Asian trading while Brent North Sea crude for January was up 37 cents at $107.29.

Gold fetched $1,274.86 per ounce at 0500 (GMT) compared with $1,272.46 on Tuesday.