Asian markets slump on fears over Fed stimulus

Asian markets dived Thursday, with Tokyo\'s Nikkei losing more than five percent and the dollar hitting a two-month low against the yen, on expectations that central bank easing measures will soon come to an end. Dealers ran for cover following a sell-off on Wall Street, with the US Federal Reserve in focus ahead of a policy meeting next week that many fear will herald the end of its $85 billion-a-month bond-buying. Tokyo slumped 5.64 percent in early trade, Hong Kong shed 2.26 percent, Sydney fell 1.17 percent and Shanghai lost 2.22 percent while Seoul skidded 0.87 percent. Sentiment has been battered this week after Japan\'s central bank held off unveiling any new monetary easing measures to cool volatility in the markets. It also reignited traders\' fears, which have been growing for several weeks, about the so-called quantitative easing by the Fed as the US economy shows signs of improving. Fed chief Ben Bernanke unveiled the scheme in September, saying the bank would continue to print money until the world\'s biggest economy was strong enough to stand on its own two legs. Japanese stocks took the brunt of Thursday\'s heat as the yen extended its gains against the dollar. In morning forex business the dollar was at 95.02 yen -- its lowest since early April and down from 95.88 yen in New York late Wednesday. The US unit, which was sitting in the high 98-yen range in Tokyo at the start of the week, has dived 8.5 percent since its spike late in May. The euro sat at $1.3348, compared with $1.3335 in New York, while it also bought 126.81 yen, from 127.86 yen. On Wall Street the Dow fell 0.84 percent, the S&P 500 slid 0.84 percent and the Nasdaq was down 1.06 percent. Oil prices were mixed, with New York\'s main contract, light sweet crude for delivery in July, dropping seven cents to $95.81 a barrel and Brent North Sea crude for July gaining one cent to $103.50. Gold was at $1,392.65 at 0200 GMT from $1,377.00 late Wednesday.