Asia’s main indexes experienced a mixed day on Wednesday with boosts from the Bank of Japan’s rates policy surprise and China’s Covid reopening capped by the continuing gloomy global picture.
Japan’s Nikkei lifted off a two-month low it hit following the BOJ’s shock decision to loosen its tight leash on government bond yields.
And Hong Kong shares tracked small gains by some Asian peers ahead of the festive season, as further relaxations of Covid-19 curbs by China marginally improved investor confidence.
Japanese government bond yields surged and the Nikkei share average fell, one day after the country’s central bank surprised markets with a shift in its yield curve control policy.
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The benchmark 10-year government bond yield jumped 7 basis points to 0.480%, its highest level since July 2015, not far off 0.50%, the revised upper limit of the Bank of Japan’s policy band.
The Nikkei ended down 0.68% at 26,387.72, its lowest close since October 13, after see-saw trade in which it briefly turned positive.
The benchmark has lost 3% in the wake of the Bank of Japan’s decision that is aimed at easing some of the costs of prolonged monetary stimulus. The broader Topix dropped 0.64% to 1,893.32.
Chinese stocks avoided major shifts as Beijing pressed ahead with the rollback of its economically painful Covid restrictions, with long-term hopes balanced off by short-term fears over a surge in cases.
The United States said it stood ready to assist China with its surging Covid-19 outbreak, warning that an uncontrolled spread there might have implications for the global economy.
Hong Kong’s Hang Seng Index added 0.34%, or 65.69 points, to 19,160.49.
China’s blue-chip CSI 300 Index was flat, while the Shanghai Composite Index dipped 0.17%, or 5.36 points, to 3,068.41. Shenzhen Composite Index on China’s second exchange fell 0.47%, or 9.29 points, to 1,969.79.
Elsewhere across the region, gold miners in Australia led a 1.3% jump for the S&P/ASX 200. Indian stocks dropped with Mumbai’s signature Nifty 50 index down 1.01%, or 186.20 points, at 18,199.10.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6%.
Gold Prices Riding High
Wall Street snapped a four-day losing streak overnight and S&P 500 futures rose 0.5% in Asia trade.
On Tuesday the BOJ widened its trading band for 10-year government bond yields from 25 basis points (bps) either side of zero to 50 bps.
That triggered a leap in the yen, which had spent most of the year sliding because of Japan’s low yields, selling in Japan’s stock market and a selloff for bonds around the world.
The resultant drop for the US dollar had spot gold prices testing six-month peaks and gold miners riding high. Spot gold was $1,816 an ounce.
“The tone is good, we’re having our little version of a Santa Claus rally,” said Damian Rooney, a dealer at Argonaut Securities in Perth, referring to typical late-December gains as markets drift toward the year end.
Key figures
Tokyo – Nikkei 225 < DOWN 0.68% at 26,387.72 (close)
Hong Kong – Hang Seng Index > UP 0.34% at 19,160.49 (close)
Shanghai – Composite < DOWN 0.17% at 3,068.41 (close)
London – FTSE 100 > UP 0.45% at 7,403.70 (0940 GMT)
New York – Dow > UP 0.28% at 32,849.74 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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