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BANGKOK. — Asian stock markets drifted yesterday as investors waited for the Federal Reserve’s latest assessment of the US economy. The Fed is not expected to announce any big changes when it releases an updated policy statement at the end of a two-day meeting. However, investors are anxious for clues about when the Fed might start scaling back its monetary stimulus.

“We’re unlikely to get anything new, but obviously everyone is cautious just in case we get anything new,” said Andrew Sullivan of Kim Eng Securities in Hong Kong.

The Fed is buying US$85 billion in Treasury and mortgage bonds every month to spur growth and lending. While long-term interest rates have been held near record lows, the programme has also drawn investors away from bonds and into higher yielding investments like stocks and commodities. Recent hints that the Fed might start scaling back its stimulus programme have sent stocks reeling.

Investors are also waiting for the US government to report its first estimate of economic growth for the second quarter. DBS Bank Ltd in Singapore said analysts are expecting a drop in GDP growth to 1 percent from 1,8 percent. Most economists blame tax increases and government spending cuts for the sluggish second quarter.

Investors are also focusing on US employment figures for July, due out tomorrow. Fed Chairman Ben Bernanke has said that the central bank could begin to scale back its bond purchases later this year if the economy strengthens, but Fed officials typically put greater weight on employment and inflation data than the GDP figures.

Japan’s Nikkei 225 index, which endured sharp swings earlier in the week, was down 0,6 percent to 13 782,92 ahead of the release of earnings from corporate giants including Panasonic and Honda. — AFP.