TOKYO (Reuters) - Asian stocks edged up early on Thursday (Aug 18) and the US dollar fell after the Federal Reserve's latest meeting minutes showed policymakers were in no hurry to add to US borrowing costs.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent, thanks to hopes that the Fed's accommodative stance - a major liquidity spigot for global markets - would continue a little longer than expected.
Australian stocks and South Korea's Kospi each added 0.1 per cent. A stronger yen, however, pulled Japan's Nikkei back 0.9 per cent.
The July meeting minutes released on Wednesday showed that Fed policymakers were generally upbeat about the U.S. economic outlook and labour market. But they also said they wanted to "leave their policy options open" as a slowdown in the future pace of hiring would argue against near-term monetary tightening.
Prior to the minutes' release, the dollar had gained after New York Fed President William Dudley rekindled prospects of a rate hike by the year-end.
But the greenback retreated after investors gained a broader insight on the Fed's policy stance, which has been a source of anxiety ever since the U.S. central bank delivered its first rate hike in almost a decade in December, 2015.
"The Fed minutes provided a much more comprehensive summary of the views of different Fed members and the market seems to have been taken a bit by surprise by how dovish many of the Fed members sounded," wrote Angus Nicholson, market analyst at IG in Melbourne. "There is clearly strong disagreement within the Fed with regards to the timing of further rate hikes."
The dollar was down 0.5 per cent at 99.79 yen, nearing a post-Brexit low of 99.55 hit on Tuesday. The euro edged up 0.1 per cent to US$1.1299 with the common currency on track to rise more than 1 per cent this week.
The dollar index dipped 0.1 per cent to 94.611, having lost about 0.7 per cent so far this week, during which it touched a 7-week low of 94.426 on Tuesday.
The greenback felt the sting of lower US Treasury yields, which fell overnight following the release of the Fed minutes.
The weaker dollar was an additional help to commodities like crude oil, which extended its rally for a fifth day on Wednesday on an unexpected drawdown in US crude and gasoline.
A softer greenback tends to favour non-US buyers of dollar-denominated commodities like oil.
US crude rose 0.1 per cent to US$46.85 a barrel, with their surge slowing after a Reuters report that suggested Saudi Arabia was cranking its crude output to new record highs, even as OPEC talked of ways to ease a global glut.
Copper, which had slid on the dollar's rise earlier in the week, trimmed some of their losses as the US currency flagged. Benchmark copper on the London Metal Exchange was up 0.25 per cent at S$4,786 a tonne after losing 0.8 per cent on Wednesday.