People walk past an electronic stock indicator of a securities firm in Tokyo, Monday, Aug. 1, 2016.
Advertisement
THE QUOTE: Steve Chiavarone, associated portfolio manager for Federated Investors, said the dollar is getting stronger, and that’s starting to hurt oil prices and slow down USA manufacturing.
A sharp fall in the price of oil overnight in the USA weighed on sentiment in Asia Tuesday, with traders also ready to be disappointed by Japanese Prime Minister Shinzo Abe’s stimulus package that will be unveiled later in the day.
The country’s first interest-rate cut since May helped send the Australian dollar down by half a US cent after the decision to $0.7500.
In late-morning trades, the benchmark Nikkei 225 Index is losing 101.72 points or 0.61 percent to 16,534.05, off a low of 16,446.90 earlier.
Shanghai ticked up 0.2 percent after opening in the red, but Taipei, Manila and Singapore were lower.
Elsewhere in the region, the Shanghai Composite Index SHCOMP, -1.28% fell 1.1% after China’s manufacturing Purchasing Managers Index for July slipped to 49.9 from 50.0, missing the median forecast of a rise to 50.1.
Many investors have thought such a shift may be inevitable as the BOJ will run out of bonds to buy from markets. Hong Kong’s stock market was closed due to a typhoon.
A few hours ahead of Friday’s meeting close, the June inflation update indicated the Bank of Japan’s benchmark, national core consumer price index, had dropped at a year-on-year rate of 0.5 percent. Analysts and economists say this may reduce the chance of the rate being taken further below zero. “Japanese corporate Q1 results are more important to me now than monetary policy”.
Prime Minister Shinzo Abe is later set to outline details of the government’s 28 trillion yen ($265bn; £200bn) stimulus package, announced last week. “In terms of genuine fiscal stimulus measures the devil is in the details”.
Shares elsewhere in Asia also edged lower, taking cues from a weak day on Wall Street where shares were under pressure from sliding USA crude oil prices. The Dow Jones industrial average fell 0.2 percent to 18,404.51. The BOJ started charging banks 0.1 percent on some of their reserves in February in an effort to get them to use their spare cash more productively and help to revive the economy and prices. The US move reversed quickly with US yields ending lower on the day as the 10-year yield dipped to 1.47% after weaker than expected US GDP data. Oil fell again, with United States crude dipping below $40 a barrel as a supply glut weighed on prices. As of Monday, the price of oil had fallen 13 percent in a little more than two weeks. While the other major indexes have set all-time records recently, the Nasdaq hasn’t managed to do the same.
Advertisement
METALS: The price of gold rose $2.10 to $1,359.60 an ounce and silver gained 15 cents to $20.50 an ounce.
