HONG KONG: Asian markets fell in holiday-reduced trade yesterday, as the Bank of Japan’s refusal to unveil any fresh stimulus measures raised concerns about central banks’ role in supporting the world’s economies.
The dollar managed to claw back some ground in forex business but remains stuck around six percent below its peaks seen at the end of last month.
Tokyo fell 0.21 percent, or 28.30 points, to 13,289.32 following a 1.45 percent loss on Tuesday, although it pared most of the earlier losses thanks to a pick-up in the dollar through the day.
Sydney fell 0.69 percent, or 32.6 points, to 4,724.5, while Seoul skidded 0.56 percent, or 10.77 points, to 1,909.91 and Wellington dipped 0.48 percent, giving up 21.45 points to close at 4,442.12.
Trade was limited, however, with Hong Kong, Shanghai, Taipei and Manila all closed for public holidays.
The BoJ said on Tuesday the Japanese economy was “picking up”, but while it warned of possible headwinds caused by weakness in key export markets it chose not to add to April’s giant bond-buying splurge.
The decision reignited fears about other central banks’ stimulus plans, with the US Federal Reserve signalling it wanted to draw up a plan to wind down its own huge $85 billion-a-month stimulus scheme.
“Stock market rises globally have been fuelled for so long in one way or another by government monetary easing programmes that any talk of their termination seems to result in knee-jerk reactions,” said Daisuke Uno, strategist at Sumitomo Mitsui Banking Corp.
“What the BoJ announced was not really new, nor dramatic, and largely applied to the bond market, but stocks are inextricably tied to currency market movements.”
He added: “The case can be made that the dollar is in line for a retracement after running up from below 80 yen to well over 100 yen in the last several months.”
On forex markets yesterday, the dollar bought 96.76 yen in Tokyo, compared with 96.01 late in New York, but still well down from 98.11 yen in Tokyo earlier Tuesday. It had hit a high of almost 104 yen in May.
The euro traded at 128.69 yen, from 127.81 late on Tuesday, while it was also at $1.3303, from $1.3311.
AFP
