BANGKOK (AP) -- Asian stock markets drifted Wednesday after U.S. retail sales added to expectations the Federal Reserve will start scaling back its monetary stimulus this year.
The U.S. government said retail sales edged up in July by 0.2 percent, slightly less than expected. But core sales -- a category that excludes autos, gas and building supplies -- reached the highest level in seven months.
Retail sales are closely watched because consumer spending accounts for 70 percent of U.S. economic activity.
The figures could have an impact on expectations of when the Fed will start to reduce its monetary stimulus. Most economists think that so-called tapering will start as soon as next month.
Atlanta Fed President Dennis Lockhart said Tuesday that it was too early to say when the bank would ease back on its stimulus, but hinted that it would likely happen before the end of the year. The Fed's next policy meeting is Sept. 17-18.
Japan's Nikkei 225 index rose 0.1 percent to 13,880.53. South Korea's Kospi advanced 0.3 percent to 1,918.40. Australia's S&P/ASX 200 shed 0.2 percent to 5,148.70. Singapore and Taiwan also fell. Mainland Chinese shares were marginally higher. Hong Kong's stock exchange was closed for the day as Typhoon Utor lashed the Asian financial center with wind and rain.
On Tuesday, European stocks received a boost after figures showed industrial production in euro countries rose by 0.7 percent in June from the month before. For the April-June quarter, output was up 1.2 percent.
Coupled with a better-than-expected ZEW survey into German investor confidence in August, hopes are high that second quarter GDP due Wednesday will show Europe has emerged from recession.
The eurozone has been in recession since the latter part of 2011 and the consensus in the markets is that the bloc's economy grew by a quarterly rate of 0.2 percent in the April-June period. Traders are also waiting for France's GDP numbers later in the day. Analysts are expecting to see slight growth after a period of contraction.
"If they snap out of it, it would signal that Europe is certainly back on track," said Evan Lucas, market strategist at IG in Melbourne, Australia. "It would put a lot of confidence in Europe."
Benchmark oil for September delivery was down 48 cents to $106.35 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 72 cents to close at $106.83 a barrel on the Nymex on Tuesday.
In currencies, the dollar fell to 98.04 yen from 98.23 yen late Tuesday. The euro fell slightly to $1.3258 from $1.3263.
Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson