Asian Shares Led Lower by Japan
May 02 2016 - 12:00AM
Dow Jones News
Japanese stocks were down sharply Monday, leading declines in
the rest of Asia on the yen's surge to a one-and-a-half-year high
against the dollar, weak earnings from several big firms, and
follow-through selling after the Bank of Japan took no action
Thursday.
The Nikkei Stock Average was down 3.7% in late morning. Japanese
markets were closed Friday for a national holiday. Australia's ASX
200 was 1.3% lower, New Zealand's NZX-50 was down 0.2%, and South
Korea's Kospi was off 0.5%. Many markets in Asia are closed Monday
for a holiday, including China, Hong Kong, and Singapore.
The falls in Japanese stocks followed the BOJ's decision to keep
its main policy unchanged, despite slowing inflation and
expectations for an expansion in its asset-purchase program,
particularly in exchange-traded funds. The yen's surge to a
one-and-a-half-year high against the dollar is also hitting
Japanese exporters.
The dollar was at ¥ 106.48 after falling as low as ¥ 106.14, the
lowest since October 2014, according to EBS. The dollar was above ¥
111.50 before the BOJ outcome.
Over the weekend, the U.S. Treasury Department, in its
semiannual currency report to Congress, called out China, Japan,
South Korea, Taiwan and Germany for relying on policies it says
threaten to damage the U.S. and the global economy. The move, meant
to pave the way for a new pan-Pacific trade deal, may discourage
the Japanese authorities from directly intervening in the currency
market, analysts say.
"Bad news take place all at once," said Katsunori Kitakura,
strategist at Sumitomo Mitsui Trust Bank. He said market turbulence
around BOJ policy meetings suggests the central bank's
communication with markets isn't as smooth as it should be.
He said, though, that market sentiment may improve in the coming
weeks if the government takes fiscal stimulus measures in time for
Group of Seven summit meetings later this month.
Electronics parts maker Murata Manufacturing Co. is down 14%
following its projections for a decline in earnings in the fiscal
year that started in April.
The company cited a higher yen, lower product selling prices,
increased fixed costs and higher research and development
expenses.
Sony Corp. was down 4.3% after the company posted a net loss in
the January-March period, weighed down by its device and mobile
communication businesses.
In Australia, lackluster earnings from Westpac Banking Corp.,
one of Australia's biggest banks, weighed heavily on Australia's
share market in early trading.
"Westpac's miss on headline expectations has set the tone for a
nervous market this morning," CMC Markets chief market analyst Ric
Spooner said. He adds that while Westpac's first-half earnings were
only marginally below expectations, and there doesn't appear to be
anything seriously alarming, investors are concerned it is
struggling to control costs. Westpac was down 4.1%.
Robb M. Stewart in Melbourne contributed to this article.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
May 01, 2016 23:45 ET (03:45 GMT)
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