By Ian Chua
SYDNEY (Reuters) - Asian stocks slipped on Tuesday, while the Turkish lira hit a record low after the United States signalled possible military action against the Syrian government over a suspected chemical weapons attack.
Dealers said there was no panic selling though, just truncated trading interest as investors waited nervously to see how the situation unfolds.
"Given the headlines overnight regarding (a potential U.S. strike) in Syria, it's a situation when people are prepared to sit there and wait," said Simon Twiss, a dealer at Arnhem Investment Management.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.4 percent, erasing Monday's rise. Tokyo's Nikkei was flat, while the safe-haven yen climbed broadly.
"It's a risk-off story because of Syria and also if you see broad repatriation from emerging markets currencies, the yen will benefit," said Michael Turner, strategist at RBC.
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U.S. Secretary of State John Kerry, in the most forceful reaction yet to last week's gas attack outside Damascus, said President Barack Obama "believes there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people."
His comments saw U.S. stocks end 0.4 percent lower in light volumes. The risk of supply disruption lifted Brent crude above $111 a barrel to a five-month high. It last traded up 0.4 percent at $111.16.
The Turkish lira hit record lows of two to the dollar, pressured by the heightened concerns over neighbouring Syria.
The Malaysian ringgit was also unloved, reaching a three-year low around 3.3290 per dollar.
"It's has been a tough time for many emerging market currencies over recent weeks. The feeling of many is that this has been triggered by QE taper expectations in the US," said Greg Gibbs, currency strategist at RBS.
"The timing of the taper almost appears less relevant now, just the fact that the Fed is thinking it is likely to happen over the next year appears to be enough."
Brazil's finance minister said the Fed has communicated its plans to reduce monetary stimulus "poorly", prompting some of the wild swings in the value of currencies and stocks in emerging market economies.
Among the major currencies, both the dollar and euro fell against the yen. The dollar eased 0.2 percent to 98.31, while the euro also declined by 0.2 percent to 131.50.
Gold took a bit of a breather after reaching an 11-week peak of $1,406.01 on Monday. It has rallied more than $200 since the end of June when prices troughed at three-year lows and traders suspect some profit-taking is in order.
It last stood at $1,397.14 an ounce.
(Additional reporting by Cecile Lefort and Maggie Lu Yueyang in Sydney; Editing by Eric Meijer)