Asian shares weaken on investors’ appetite for U.S. dollar

Asian share markets were seen subdued on Wednesday, while the U.S. dollar recorded a two-month peak. This followed after investors’ sentiment was dampened by persistent worries about the global economic recovery, prompting them to resort to safer assets.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.3%, recording its first gain this week. Japan’s benchmark index Nikkei dropped 0.4% after a two-day holiday. Elsewhere, markets were muted as they failed to track Wall Street’s rally. Meanwhile, Hong Kong and Shanghai strengthened.

Australia’s ASX 200 tallied a 2.6% gain as Australian bonds advanced. However, the Aussie dollar bucked the trend as it dropped on growing expectations that the central bank would reimplement policy easing next month.

Following hawkish remarks from a senior U.S. Federal Reserve official, the dollar made laudable gains as it extended in Asia amid a general tone of risk aversion.