* Japan's Nikkei opens lower, Asian stocks slip in early
* Fed minutes on Wednesday could provide clues to policy
* Dollar supported as yields on U.S. Treasuries around
By Lisa Twaronite
TOKYO, Aug 20 Asian stocks opened lower on
Tuesday under a cloud of uncertainty about when the U.S. Federal
Reserve will start to reduce its stimulus, which pushed up
yields on U.S. Treasuries to two-year highs.
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.5 percent, while Japan's benchmark Nikkei
stock average shed 0.8 percent in early trade.
Minutes from the U.S. central bank's last policy meeting
will be released on Wednesday and could provide investors with
fresh clues on when the Fed plans to taper its monthly $85
billion in asset purchases, which many believe could begin next
A key risk in the minutes is whether the Fed has begun
discussing a possible change in its threshold rate for
unemployment from the current 6.5 percent level as a means of
providing additional accommodation, strategists at Barclays
Research said in a note to clients on Tuesday.
"Any discussion in this regard is likely to be viewed as a
dovish surprise by the market," they said, adding that the
dollar's failure to rally broadly despite the sharp plunges in
high-yielding currencies suggests that the market may already be
positioning for such an announcement.
Against a basket of major currencies, the dollar was
slightly higher, as the appeal of higher yields on U.S. debt
offset fears of the impact of Fed stimulus reduction.
The yield on benchmark 10-year Treasury notes
rose as high as 2.90 percent on Monday. That was its highest
since July 2011, and up sharply from 1.60 percent in early May,
before the Fed started signalling its intentions to pare back
its quantitative easing if the economy continued to strengthen.
Emerging markets that have benefited from the Fed's easy
policy are already feeling the pinch. The Indian rupee
cratered to a record low of 63.30 per dollar on Monday, and
Indonesia's rupiah and Brazil's real both
skidded to four-year lows.
On Monday, the Dow Jones industrial average, the
Standard & Poor's 500 Index and the Nasdaq Composite
Index began the week with losses, all ending lower for
the fourth straight session amid the continuing uncertainty
about the U.S. economic policy outlook.
On the commodities front, copper prices added 0.2
percent to $7,321.75, while gold fell to $1,366.81 per
ounce, after snapping a three-day winning streak on Monday and
moving away from a two-month high hit that session.
Brent crude prices fell 0.1 percent to $109.80 a
barrel, pressured by Fed fears but supported by the loss of
Libya's oil exports as well as concerns that continuing unrest
in Egypt could spread and interfere with supply.