 "A man walks past a display of the Nikkei average and other market indices outside a brokerage in Tokyo. Photo: Reuters")
Asian stocks wavered on Thursday as investors grappled with the seemingly diminishing ability of major central banks to stimulate growth, while a tumble in crude oil inflamed already heightened risk aversion.
Global bond yields have risen in sympathy with depressed sentiment, adding to nervousness over when the US Federal Reserve might decide to raise rates.
MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.1 per cent.
Japan's Nikkei lost 0.6 per cent and Australian stocks shed 0.1 per cent. South Korea's Kospi was little changed.
The soggy Asian start followed an uninspiring performance overnight on Wall Street where the Dow lost 0.2 per cent and the S&P 500 shed 0.1 per cent, with uncertainty over future interest rate hikes and lower energy shares weighing.
While expectations over a Fed rate hike at next week's meeting have faded, investors have been bracing for a tightening before year-end.
Perceived limits to the extensive monetary easings led by major central banks like the European Central Bank and the Bank of Japan (BoJ) have also soured broader risk sentiment, driving global debt yields higher.
The Bank of England (BoE) will be a focus on Thursday. The central bank is seen standing pat after easing policy last month, amid signs it overestimated the initial shock to Britain's economy from June's Brexit vote.
"Having just increased stimulus in August, the BoE won't be eager to add bond purchases or cut interest rates again," wrote Kathy Lien, managing director of FX Strategy at BK Asset Management.
"Recent data shows how their efforts have paid off so while the BoE will leave the door open to additional stimulus, they should note the improvements in the economy and signal to the market that they are in wait and see mode."
Sterling added to modest gains made overnight and was last up 0.2 per cent at $1.3266.
Elsewhere, the dollar was little changed at 102.555 yen. It had briefly risen above 103.00 the previous day on speculation the BoJ would increase stimulus next week.
The euro was steady at $1.1246.
Brent crude limped up 0.5 per cent to $46.07 a barrel after dropping 2.6 per cent on Wednesday when data showing large weekly builds in US petroleum products offset a surprise draw in crude stockpiles.
The 10-year US Treasury note yield stood at 1.697 per cent after sliding overnight to as low as 1.682 per cent.
The 10-year yield fell as bond market weakness, which had sent it to a three-month high of 1.752 per cent earlier this week, ebbed slightly.
Long-dated bonds have underperformed for much of the past month in line with a steepening yield curve in Japanese government bonds. The BoJ is studying options to steepen the yield curve to help prompt new lending by banks that have been hurt by low long-term rates.
