GLOBAL MARKETS-Asian stocks edge lower after Wall Street dips in month-end trade

* U.S. comments suggest new support for Taiwan
* AstraZeneca begins enrolling 30,000 in COVID-19 vaccine
study
* Dollar hits two-year trough as Fed commits to easy policy
* Despite stock pullback, S&P posts best August since 1986

By Alwyn Scott
NEW YORK, Aug 31 (Reuters) - Asian stocks were set to weaken
on Tuesday following a softer Wall Street close while the dollar
slipped as markets digested new Federal Reserve comments that
suggested rates will stay low for an extended period.
Australia's S&P/ASX 200 .AXJO lost 0.89% in early trading,
while Japan's Nikkei 225 .N225 fell 0.22%,
Hong Kong's Hang Seng index futures .HSI HSIc1 lost
0.38%.
Wall Street declines overnight were caused by month-end
portfolio rebalancing "rather than a new trend in equities,"
said Rodrigo Catril, senior FX strategist at NAB Market Research
in Sydney.
The Dow Jones Industrial Average and the S&P 500 ended in
the red, while the Nasdaq rose solidly. The S&P gained more than
7% for the month to notch its best August since 1986 in what is
traditionally a softer month for stock performance.
"After such a strong summer run we're reverting back to the
old pandemic playbook, so we see tech outperforming," said Mona
Mahajan, senior U.S. investment strategist at Allianz Global
Investors in New York. "Really, that's a defensive move as
people think about stay-at-home more as we're heading toward
that fall season."
Investors in Asia await the release of China manufacturing
data and an interest rate decision from the Australian central
bank. While the Reserve Bank of Australia is not expected to
change policy, its commentary on the economic outlook will be
closely watched.
Most stocks slid overnight, but chalked up another month of
gains for August. U.S. tech shares rose again Monday, powered by
stock splits that lifted Apple Inc AAPL.O and Tesla Inc
TSLA.O .
Providing some support to sentiment was AstraZeneca's
AZN.L plan to enroll 30,000 participants in a late-stage study
to evaluate its COVID-19 vaccine candidate, AZD1222. Vaccine
news often lifts markets. Taiwan stocks could see a boost after the U.S. said on
Monday it was establishing a new bilateral economic dialogue
with the country, an initiative it said was designed to support
Taipei.
Fed Vice Chair Richard Clarida on Monday expanded on
Governor Jerome Powell's comments from last week, saying that
under the U.S. central bank's new policy view, a low rate of
unemployment does not on its own trigger higher interest rates.
Last week, the Fed said its new strategy plan is to use
higher inflation when the economy is robust to offset the impact
of periods of weaker prices. The Nasdaq fared even better than the S&P for the month, up
nearly 10% as it rallied for a fifth straight month.
Monday marked the first trading day for the revamped Dow,
with Salesforce.com CRM.N , Amgen Inc AMGN.O and Honeywell
International Inc HON.N joining the 30-component index,
replacing Exxon Mobil Corp XOM.N , Pfizer Inc PFE.N and
Raytheon Technologies Corp RTX.N . Honeywell ended the session
lower while a move higher late in the day pushed Salesforce and
Amgen into positive territory. In Asia, China's Caixin manufacturing purchasing managers'
index
The Dow Jones Industrial Average .DJI fell 0.79%, the S&P
500 .SPX lost 0.23%, and the Nasdaq Composite .IXIC added
0.68%.
The dollar edged lower against a basket of major currencies
early on Tuesday. The dollar index =USD fell 0.08%, with the
euro EUR= up 0.02% to $1.1938.
The Japanese yen strengthened 0.04% versus the greenback at
105.86 per dollar, while Sterling GBP= was last trading at
$1.3364, down 0.04% on the day.
Expectations that the Fed will keep interest rates low for
an extended period kept the dollar soft, marking a fourth
straight month of declines, its longest losing streak since
2017.

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