Asian stocks fell a second day after Federal Reserve minutes showed some U.S. policy makers were concerned about low inflation. Shares in Japan gained as the yen weakened past 118 per dollar.

The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 139.54 as of 9:04 a.m. in Tokyo after dropping 0.7 percent yesterday. Many Fed officials saw a need to remain attentive to signs of a drop in inflation expectations, according to minutes of the Feds October review released yesterday. Data showed Japans trade deficit narrowed after exports gained 9.6 percent last month from the previous year, the biggest gain in eight months. The yen slid 0.2 percent to 118.15 per dollar, trading near its lowest since August 2007.

South Koreas Kospi index slid 0.3 percent. Australias S&P/ASX 200 Index sank 0.5 percent. New Zealands NZX 50 Index added 0.1 percent. Markets in China and Hong Kong have yet to open. Preliminary data today is expected to show China factory activity slowed from last month.

Hong Kongs Hang Seng Index is heading for its biggest weekly decline since March as buy orders for Shanghai shares through the Hong Kong exchange link slowed to a trickle after the programs debut this week. International investors bought a net 2.6 billion yuan ($424.7 million) of Shanghai shares out of the 13 billion yuan daily limit under the link yesterday, while mainland investors used about 2.4 percent of their 10 billion yuan quota for Hong Kong stocks.

Source : Bloomberg