Asia stocks down after Yellen hints at rate hike

Asian markets fell on Thursday after the head of the US Federal Reserve hinted that the central bank could raise interest rates sooner than expected. The comments by Janet Yellen followed an expected third successive cut in the Fed's quantitative easing (QE) stimulus programme, and took markets by surprise, boosting the dollar and sending Wall Street tumbling. Tokyo dropped 1.65 percent, or 238.29 points, to 14,224.23, Sydney gave up 1.15 percent, or 61.6 points, to 5,294 and Seoul fell 0.94 percent, or 18.16 points, to close at 1,919.52. Shanghai closed 1.40 percent lower, giving up 28.26 points to 1993.48, while Hong Kong was down 1.84 percent in the afternoon. Emerging markets were also hit as higher borrowing costs could see foreigners repatriating their money back to the United States. QE has been credited with fuelling a boom in developing nations as traders pumped cheaper cash into them in search of better returns on their investments. Taipei closed 1.06 percent, or 92.13 points, lower at 8,597.33, while in the afternoon Jakarta was down 2.10 percent and Manila was down 0.87 percent. However, Wellington bucked the trend and rose 0.11 percent, or 5.68 points, to 5,160.39 after data showed the New Zealand economy picked up in 2013, helped by strong manufacturing. The Fed on Wednesday lopped a further $ 10 billion a month off its bond-buying scheme – following similar moves at its past two meetings -- saying the economy was picking up and a recent spate of soft data was caused by severe winter weather. It also said it would scrap its target of 6.5 percent unemployment and 2.5 percent inflation before weighing an interest rate increase from the current record lows, according to AFP.