February 19, 2014 / 11:52 PM / 4 years ago

GLOBAL MARKETS-Stocks slip, dollar firms as Fed minutes back taper

* Minutes of Fed meeting show intention to stay the course on stimulus withdrawal

* Investors await China “flash” PMI for Feb after downside surprise in Jan

* Dollar index edges away from 2014 low

By Lisa Twaronite

TOKYO, Feb 20 (Reuters) - Asian stocks languished in early trade on Thursday and the dollar firmed, after minutes of the Federal Reserve’s latest policy meeting showed it remained on track to taper its stimulus despite a recent spate of downbeat U.S. economic data.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.1 percent lower, though Australia’s main index pushed 0.3 percent higher.

Investors were waiting on the preliminary China Purchasing Managers’ Index (PMI) from HSBC/Markit for February later in the session. The January report surprised on the downside, and another decidedly weak reading could reignite concerns about the health of the world’s second-largest economy.

Despite seasonal volatility in the first months of the year and the relatively small scope of this survey compared to China’s official PMI, “there will be plenty of market tension today,” said Sean Callow, currency strategist at Westpac in Sydney.

“The details of the January survey incline us to expect a weak reading in February but not to place too much weight on it,” Callow said in a note to clients.

On Wall Street on Wednesday, the Dow Jones industrial average, the Standard & Poor’s 500 Index and the Nasdaq Composite Index all skidded, following release of the Fed minutes.

The minutes showed members on the Fed’s policy setting committee emphasized their commitment to trimming the central bank’s asset-purchase program in predictable $10-billion steps.

The Fed stance to maintain its the pace of stimulus-tapering comes despite a recent run of weak U.S. data, possibly reflecting confidence among policymakers about the growth trajectory. Analysts have noted that bad weather was a big factor in the soft U.S data.

The yield on benchmark 10-year Treasury notes stood at 2.737 percent, compared with Wednesday’s U.S. close of 2.734 percent.

Against the yen, the greenback inched up on the day to 102.32 yen, not far from a two-week high of 102.73 yen hit on Tuesday.

The dollar index firmed to 80.202, stepping away its Wednesday low of 79.927, which was its weakest since late December.

The euro was holding steady at $1.3733, not far from the previous session’s high of $1.3773, which was its peak since Jan. 2.

In commodities markets, U.S. crude rose about 0.2 percent to $103.47 a barrel, after touching a four-month high on Wednesday after forecasts for more cold weather next week.

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