Malay Mail Online – March 15, 2016 – TOKYO, March 15 — Shares in Tokyo drove Asian stocks down from a two-month high as investors awaited the Bank of Japan’s policy review, with mining and energy companies falling following a retreat in oil prices.
The MSCI Asia Pacific Index dropped for the first time in four days as Japan’s Topix index declined with Australian equities.
The yen was little changed for a second session with economists predicting the BOJ will hold steady when it comes to stimulus after unexpectedly moving into negative interest-rates territory in January.
The dollar held onto gains versus most major peers as Korea’s won weakened.
Oil traded below US$38 (RM156.54) a barrel following a 3.4 per cent drop yesterday. Gold was near a two-week low.
The BOJ’s review, to be followed by a policy decision from the Federal Reserve tomorrow, comes as investors start to question the potency of central bank intervention.
Japan’s surprise shift into negative rates and last week’s unprecedented stimulus move from the European Central Bank have received a mixed reception in markets as concern over a potential global slowdown and the impact of falling oil prices unnerves traders.
World equities have staged a cautious comeback since reaching a 2 ½-year low mid-February, as the prospect of a production freeze steadied oil prices and commodities.
“Markets continue to fret over how much firepower central banks have left and whether reassuring words and preemptive actions will be sufficient to keep the global expansion on track,” Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand Ltd, said in a client note.
“Activity sides of economies have generally fared reasonably well thus far, but with inflation already very low, the risk is that an adverse global shock could generate a bout of sustained outright deflation, which is likely causing some sleepless nights in the central-bank fraternity.”
As well as the BOJ, investors are looking ahead to the release of meeting minutes from the Reserve Bank of Australia today, as well as retail sales data out of Singapore. Indonesia updates on trade and Sri Lanka will report on gross domestic product. Figures on remittances are due in the Philippines.
Stocks
The Asia-Pacific gauge lost 0.3 per cent as of 9:24am Tokyo time, with the Topix declining 0.3 per cent. The Kospi index in Seoul added 0.1 per cent. Australia’s S&P/ASX 200 Index slipped 0.5 per cent, as sub-indexes of energy and raw-materials shares dropped at least 0.7 per cent. New Zealand’s S&P/NZX 50 Index rose 0.6 per cent.
Standard & Poor’s 500 Index futures were little changed early today, following a 0.1 per cent drop in the US benchmark last session. The index fluctuated yesterday, at one point rising 0.1 per cent. The MSCI Emerging Markets Index climbed 0.3 per cent to its highest level since Dec. 25.
Futures on Hong Kong’s Hang Seng China Enterprises Index added 0.2 per cent in most recent trading, as contracts on the FTSE China A50 Index gained 0.1 per cent. The biggest US exchange-traded fund tracking Chinese shares climbed 1.1 per cent yesterday, to its highest level since March 7. — Bloomberg