Asian Shares Retreat Amid China's Cautious Approach To Stimulus

(RTTNews) - Asian stocks declined on Friday, with uncertainty around Fed easing, a lack of big-ticket stimulus from top metals consumer China and anxiety ahead of next week's Bank of Japan (BOJ) policy meeting weighing on sentiment.

The dollar traded firm and the Japanese yen was steady as investors digested another hotter-than-expected U.S. inflation reading and looked ahead to next week's BOJ policy meeting for any possible changes in monetary policy.

Gold edged up slightly while oil consolidated solid weekly gains to hover near fourth-month high.

China's Shanghai Composite index rose 0.54 percent to 3,054.64 as the country's central bank left its key policy rate unchanged and withdrew cash from a medium-term policy loan operation for the first time in 16 months.

Some analysts and traders said the central bank was reducing liquidity in line with a government call to prevent idle funds.

However, the central bank-backed Financial News reported, citing sources that the central bank has no intention of actively draining cash.

Hong Kong's Hang Seng index fell 1.42 percent to 16,720.89 as data showed China's house prices continued to fall in February, underlining the challenge facing the country's beleaguered property sector.

Tech stocks were among the worst hit due to lingering concerns over U.S. sanctions against Chinese biotechnology firms.

Japanese markets ended slightly lower as the country's largest union group announced hefty wage hikes and the Bank of Japan meeting loomed, with the central bank widely expected to put an end to its negative interest rates and yield curve control policies.

The Nikkei average slid 0.26 percent to 38,707.64 while the broader Topix index settled 0.35 percent higher at 2,670.80. Tech stocks underperformed, with Advantest falling 1.4 percent and Tokyo Electron giving up 4.9 percent.

Seoul stocks tumbled as traders pared their expectations for a U.S. rate cut in June and braced for more hawkish signals from a Federal Reserve meeting next week. The Kospi average slumped 1.91 percent to 2,666.84, snapping a three-day winning streak. Samsung Electronics and KB Financial both fell around 3 percent.

Australian markets ended notably lower amid expectations the Reserve Bank may maintain its hawkish stance at a policy meeting next week.

The benchmark S&P/ASX 200 dropped 0.56 percent to 7,670.30 while the broader All Ordinaries index dipped 0.63 percent to close at 7,923.80. Miners led losses as iron ore prices extended declines on China growth concerns.

Graphite producer Syrah Resources plunged 21.4 percent following a discounted placement.

Across the Tasman, New Zealand's benchmark S&P NZX-50 index fell 0.35 percent to 11,766.98.

U.S. stocks declined overnight as hotter-than-expected inflation producer inflation print sent Treasury yields higher and cast doubt on a June rate cut.

The producer price inflation rose 0.6 percent in February from last month, outpacing the modest 0.3 percent gain forecasted by economists.

Retail sales numbers for February came in short of estimates while unemployment claims dipped unexpectedly during the preceding week, separate reports revealed.

The Dow dipped 0.4 percent, while the S&P 500 and the tech-heavy Nasdaq Composite both gave up around 0.3 percent.