HONG KONG: Asian markets mostly fell on Tuesday following the previous day’s rally, with Tokyo tumbling more than two percent at one point after the Bank of Japan failed to announce any new stimulus measures.
The dollar lost ground against the yen as dealers were left disappointed by the Japanese central bank, while Wall Street’s lead was anaemic despite news that Standard & Poor’s had upgraded its debt rating outlook on the United States.
Tokyo’s Nikkei, which surged almost five percent Monday on upbeat US jobs news, ended down 1.45 percent, or 196.58 points, at 13,317.62. Seoul fell 0.62 percent, or 12.02 points, to 1,920.68 while in the afternoon Hong Kong was off 0.95 percent.
However, Sydney added 0.41 percent, or 19.4 points, to close at 4,757.1.
Shanghai was closed for a public holiday.
The BoJ said the economy was improving and held off ramping up April’s huge stimulus scheme, surprising some analysts who had expected new measures to calm volatile markets.
“Japan’s economy has been picking up,” the bank said in a statement, adding that capital spending by the nation’s firms “appears to have stopped weakening on the whole”.
Some market participants had speculated that the central bank would extend the length of fixed 0.1 percent rate loans to banks to two years or more from the current one year, so that they can buy more Japanese government bonds.
“The decision is likely to disappoint the market and fuel yen-buying sentiment,” said Takahiro Sekido, economist with the Bank of Tokyo-Mitsubishi UFJ. However, he added that “there is room for fresh measures at the next meeting”.
The news sent the dollar down to 97.98 yen at one point, from 98.98 yen just before the two-day policy meeting ended. By mid-afternoon it was fetching 98.43 yen.
The euro eased to 130.61 yen from 131.05 yen in New York late Monday, while it bought $1.3267 compared with $1.3254.
Wall Street ended flat as soft Chinese trade and investment data offset the news that S&P had upgraded its US outlook, saying there is now less than a one-in-three chance for a downgrade in the near term.
The agency cited an improved US political climate following the “fiscal-cliff” deal at the end of 2012 and an economic environment that should lead the country to “match or exceed its peers in the coming years”.
The Dow and S&P 500 ended flat, while the Nasdaq edged up 0.13 percent.
Oil prices were mixed, with New York’s main contract, West Texas Intermediate for delivery in July, down 11 cents to $95.66 a barrel in the afternoon. Brent North Sea crude for July shed 29 cents to $103.66.
Gold was at $1,382.50 at 0650 GMT from $1,380.57 late Monday.
In other markets:
— Taipei shed 0.54 percent, or 44.40 points, to 8,116.15.
Taiwan Semiconductor Manufacturing Co. was 0.46 percent lower at Tw$108.0, while chip design house MediaTek fell 2.53 percent to Tw$366.5.
— Wellington gave up 0.22 percent, or 9.81 points, to end at 4,463.58.