Asian markets were down Thursday tracking a negative lead from Wall Street, with a stronger yen hitting the Japanese market ahead of the Bank of Japan's meeting outcome.
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Investors took a cue from Wednesday's losses on Wall Street following lower-than-expected readings on the U.S. nonmanufacturing sector and private-sector jobs growth.
Focus was on the BOJ's policy meeting result due later Thursday. Expectations for fresh easing measures are high as it will be the first meeting under new governor Haruhiko Kuroda who is committed to realizing the bank's 2.0% inflation target.
All 10 economists surveyed by Dow Jones expect the Bank of Japan to expand its asset purchases, with some betting it will increase the amount by �15 trillion-�20 trillion a year and start buying Japanese government bonds with maturities longer than three years, the current limit.
Seven of those surveyed say the central bank will decide to make its asset-buying program "open-ended" from this month or next, instead of waiting for next January as scheduled. Two expect the introduction of a new easing target in addition to its existing inflation and asset-buying targets.
"In the absence of open-ended, multi-asset class purchases to bring consumer price inflation to 2.0% within two years, there is a more than reasonable chance that the Board may well disappoint," David Scutt, Treasury dealer at Arab Bank wrote in a note to clients.
The Nikkei Stock Average underperformed its regional peers, falling 1.7% amid a stronger yen. Major exporters were lower: Canon dropped 4.3%, Nintendo slid 2.6% and Toyota Motor fell 1.4%.
Mitsubishi Heavy Industries was a bright spot amid a sea of red in Tokyo, rising 0.4% on a Nikkei report that the company, along with France's Areva SA, has clinched a joint contract to construct a nuclear power plant in Turkey.
In Sydney, the S&P/ASX 200 fell 0.8%. Resources plays weighed on the Australian market amid commodity price weakness including a decline in copper to an eight-month low overnight. BHP Billiton fell 1.3%, Newcrest Mining dropped 4.2% and Rio Tinto lost 1.0%.
In foreign exchange markets, the yen was stronger against the U.S. dollar and the euro as investors priced-in worries that the Bank of Japan's policy outcome could underwhelm market participants.
The greenback was recently at �92.95 versus �93.05 late Wednesday in New York, while the euro was at �119.39 from �119.51.
"Our base line view remains that risks on USD/JPY this month are skewed to the downside given sky-high expectations," Westpac's Sean Callow wrote in a note.
Investors were also focused on the European Central Bank's policy decision due later Thursday as well as Friday's U.S. jobs data for trading cues.
South Korea's Kospi Composite fell 1.6% amid continued concerns over North Korea's escalating military threats, while Singapore's Straits Times Index was off 0.2%.
Markets in China, Hong Kong and Taiwan were shut for holidays.
Write to John Phillips at john.phillips@dowjones.com
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