SYDNEY - Asian shares slipped on Monday as Israel's push into Gaza stirred fears of a wider conflict ahead of central bank meetings in the United States, Britain and Japan, the latter of which might see a policy tightening.
Risk appetite was dulled by Israel's push to surround Gaza's main city in a self-declared "second phase" of a three-week war against Iranian-backed Hamas militants. "Remaining uncertainty about the wage outlook, combined with stresses in global bond markets could prompt the BOJ to err on the side of caution, making our view that YCC will be scrapped a very close call," said analysts at Barclays.
The sharp rise in market borrowing costs has convinced analysts the Federal Reserve will stand pat at its policy meeting this week, with futures implying a 97% chance of rates staying at 5.25-5.5%.