Tuesday, 15 September 2015 11:38
HONG KONG: Asian shares mostly slipped Tuesday as China’s economic woes keep investors on edge, while Japan’s Nikkei retreated and the yen ticked higher after the country’s central bank held off fresh measures to shore up its torpid economy.
While the China-fuelled volatility that has characterised much of the past month’s trading has eased off, much of the morning’s confidence waned as investors turn their attention to Thursday’s crucial US interest rate decision.
Most of the emerging currencies that rallied in the morning were weaker in the afternoon. And the Australian dollar, given a boost by news the popular Malcolm Turnbull would replace Tony Abbott as prime minister, relinquished initial gains.
While the Bank of Japan was widely expected not to expand its giant stimulus Tuesday, there was a sense of disappointment after its announcement in which it said the economy “has continued to recover moderately”.
However, it did indicate “exports and production are affected by the slowdown in emerging economies” and analysts said further monetary easing measures were still likely to come.
Marcel Thieliant of Capital Economics said in a client note: “The Bank of Japan’s more cautious assessment of economic conditions suggests that policymakers will announce additional monetary stimulus before too long.”
Despite more than two years of massive government spending and central bank monetary easing, Japan’s leaders are struggling to kickstart growth in the world’s number three economy with a hoped-for inflation surge also failing.
The tepid outlook comes against a backdrop of global turmoil in the wake of China’s yuan devaluation last month.
Dealers will be watching to see what bank governor Haruhiko Kuroda has to say at a news conference later in the day about its plans for the future.
“If we see anything from Mr Kuroda and the BoJ today it will be setting the scene for additional measures if they so need,” Chris Weston, chief market strategist in Melbourne at IG, said in an e-mail to clients.
