* MSCI Asia ex-Japan down 0.5 pct, Nikkei opens 0.6 pct
* Talk of hedge fund liquidation shakes risk sentiment
By Chikako Mogi
TOKYO, Feb 21 (Reuters) - Asian shares fell and the
Australian dollar eased on Thursday as risk sentiment was shaken
by talk in global markets overnight that a hedge fund had been
liquidating large positions in commodities, as well as worries
the Federal Reserve could slow its bond buying programme.
Crude oil posted its biggest daily fall so far this year on
Wednesday, while gold fell nearly 3 percent to a seven-month low
in its biggest single-day drop in almost a year, on the market
rumours that the hedge fund was forced to liquidate substantial
The CBOE Volatility Index, which gauges investor risk
appetite on Wall Street, rose 19 percent to 14.68 in the biggest
jump this year.
Traders said the selling in broad markets coincided with the
release of the minutes from the Fed's Jan. 29-30 meeting, which
showed policymakers discussed the slowing or stopping of Fed
bond purchases aimed at reducing unemployment.
We all heard the hedge fund rumour and price action
appeared to back such a rumour, but nobody has seen hard news,"
said Yuji Saito, director of foreign exchange at Credit
Agricole in Tokyo.
"The price action also happened at the same time as the
Fed's minutes which suggested the risk of an exit (from the
quantitative easing), so it's natural that money which had fled
the dollar was returning, such as from gold. I think the fallout
from the Fed's minutes will continue this session, prompting
some money to head towards the dollar," Saito said.
The MSCI's broadest index of Asia-Pacific shares outside
Japan fell 0.5 percent, snapping a three-day
rising streak and off its highest levels since August 2011
reached on Wednesday.
Resources-reliant Australian shares fell 0.8
percent, pulled down by weakness in the mining sector after
gold, equities and resource-linked currencies were all knocked
lower the day before. The Australian stock market hit a
4-1/2-year high on Wednesday.
The Australian dollar was down 0.1 percent to
$1.0244 after sliding 1 percent to $1.0245.
South Korean shares opened down 0.5 percent after
hitting a one-month high the day before while Tokyo's Nikkei
stock average opened 0.6 percent lower, after closing
on Wednesday at its highest since late September 2008.
European shares fell on Wednesday as surprise dividend cuts
by RSA and Lufthansa and weak results from the likes of Accor
and BHP Billiton weighed on sentiment.
MSCI's all-country world equity index rose
to its highest level since June 2008 on Wednesday, before
retreating to trade down 0.7 percent after the Fed's minutes.
"A number of participants stated that an ongoing evaluation
of the efficacy, costs and risks of asset purchases might well
lead the committee to taper or end its purchases before it
judged that a substantial improvement in the outlook for the
labor market had occurred," the minutes said.
The Fed's bond buying has played a significant role in
calming markets by ensuring the central bank will keep its
ultra-accommodative stance until growth is solid.
"We wouldn't leap to conclusions over the trajectory of QE4
(quantitative easing), which Fed officials in recent days have
suggested would likely be sustained at least into H2 13. But it
raises the stakes for Fed chairman Bernanke's semi-annual
testimony on Tuesday (Feb. 26)," said Sean Callow, a senior
currency strategist at Westpac, in a note to clients.
The dollar rose 0.1 percent to 93.66 yen while the
euro eased 0.1 percent to $1.3270, hovering near its
lowest since Jan. 23.
U.S. crude fell 0.6 percent to $94.62 a barrel
Spot gold was up 0.5 percent to $1,569.14 an ounce.