Japan’s benchmark Nikkei 225 slumped 2.6% to 38,094.24, Australia’s S&P/ASX 200 rose 0.4% to 8,125.80, South Korea’s Kospi gained 0.5% to 2,785.56, Hong Kong’s Hang Seng slid 0.3% to 17,285.66, while the Shanghai Composite declined 0.3% to 2,931.50
Asian shares traded mixed Thursday as Tokyo’s benchmark plummeted as the U.S. dollar dipped against the yen.
Regional investors are also digesting the rally on Wall Street that came on hopes U.S. cuts to interest rates will be arriving soon.
A strong yen is a plus for Japan’s purchases but hurts the nation’s giant exporters such as Toyota Motor Corp., by eroding the value of overseas profits.
Japan’s benchmark Nikkei 225 slumped 2.6% in morning trading to 38,094.24. Australia’s S&P/ASX 200 rose 0.4% to 8,125.80. South Korea’s Kospi gained 0.5% to 2,785.56. Hong Kong’s Hang Seng slid 0.3% to 17,285.66, while the Shanghai Composite declined 0.3% to 2,931.50.
In currency trading, the U.S. dollar declined to 149.61 Japanese yen from 149.92 yen. The euro cost $1.0831, little changed from $1.0830. The dollar had been trading at 160-yen levels several weeks ago. But that reversed course as anticipation grew for a BoJ rate cut, which came Wednesday.
Toyota stock dipped 5.3%, while Nintendo declined 3.5% and Sony 3.1%.
Analysts said indications from the Fed were that rate cuts were coming.
A September cut is now priced in with certainty, and around three cuts are priced in by the year-end, said Robert Carnell, regional head of research Asia-Pacific at ING Economics.
On Wall Street, the S&P 500 climbed 1.6% for its best day since February. The Dow Jones Industrial Average added 99 points, or 0.2%, and the Nasdaq composite surged 2.6%.
The widespread gains came as Treasury yields eased in the bond market after the Fed gave the clearest indication yet that it could begin reducing interest rates in September. Fed Chair Jerome Powell said policy makers are “getting closer to the point” of comfort about inflation where they could reduce rates for the first time since COVID-19 crashed the economy.
We think that the time is approaching, Powell said. And if we do get the data that we hope we get, then a reduction in our policy rate could be on the table at the September meeting.
