Heng Kun Hau, head of market strategy at UOB, said that the faster pace of reduction in the Fed's bond-buying program is likely to provoke only minor volatility in Asian markets.
It is expected that during its December meeting, the Fed will announce that it will halve bond purchases from January to $30 billion per month. In addition, the Fed may clarify the prospects for raising rates.
Some investors fear that the reduction of the Fed's quantitative easing program will lead to a repeat of the situation in 2013, when a reduction in bond purchases caused a bond sale and led to the fact that emerging markets in Asia faced a sharp outflow of capital and currency depreciation.
"So far, all central banks in Asia are very well prepared to reduce the Fed's QE. Foreign exchange reserves are at an all-time high. We will be able to cope with capital outflows when the Fed really takes action," said Heng Kun Hau, adding that Asia's strong trading fundamentals are also likely to support countries in the region and help them withstand a reduction in Fed bond purchases.