• Asian stocks weaken amid EU tensions over Crimea

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    HONG KONG: Asia’s markets dipped in edgy trade on Wednesday after Russia ratcheted up tensions in Eastern Europe by formally annexing Crimea from Ukraine.

    Investors are also awaiting the end of the Federal Reserve’s latest policy meeting, hoping for some guidance from the bank’s new head Janet Yellen on her plans for interest rates.

    Tokyo slipped 0.39 percent, Hong Kong fell 0.26 percent, Seoul gave up 0.10 percent and Shanghai was 0.71 percent lower, while Sydney was flat.

    Russia’s President Vladimir Putin signed a treaty taking Crimea into its fold following a controversial referendum at the weekend that US-led Western leaders slammed as illegal.

    The move is Russia’s first expansion since the end of World War II and comes less than three weeks after its troops seized control of the strategic peninsula in response to the ouster of Ukraine’s pro-Moscow government.

    Kiev’s new leaders warned the showdown had entered a “military stage” after soldiers were killed on both sides following a shoot-out in Crimea.

    Despite the crisis in Europe showing no sign of abating, traders are keenly watching the Fed’s two-day meeting, which concludes later Wednesday.

    On Wall Street the Dow rose 0.55 percent, the S&P 500 shot up 0.72 percent—to end just short of a new record high—and the Nasdaq climbed 1.25 percent.

    While analysts expect a further cut in the bank’s stimulus program as the economy picks up, they also predict it will drop its unemployment rate threshold of 6.5 percent for considering tightening interest rates.

    On currency markets the dollar traded at 101.33 yen against 101.42 yen in New York Tuesday afternoon.

    The euro bought $1.3931 and 141.19 yen compared with $1.3932 and 141.29 yen.

    The Japanese currency hardly moved after official data showed Japan’s trade deficit expanded 3.5 percent year-on-year to 800.3 billion yen ($7.9 billion) in February—its 20th straight shortfall.

    The median forecast by economists was for a smaller deficit of 595 billion yen, according to a poll by the leading Nikkei business daily.

    Oil prices dipped. New York’s main contract, West Texas Intermediate for April delivery, eased 24 cents to $99.46 in early Asian trading while Brent North Sea crude for May lost 15 cents to $106.64.

    Gold fetched $1,358.05 an ounce at 0220 GMT compared with $1,362.05 late Tuesday.

    AFP

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