Asian markets mixed, BoJ move disappoints
HONG KONG (AFP) – Asian markets were mixed on Tuesday, with Tokyo’s Nikkei falling and the yen strengthening as dealers were left disappointed by the Bank of Japan’s plan to boost the economy.
After a two-day meeting the central bank said it would adopt a two per cent inflation target that had been demanded by the country’s new government while also launching an open-ended asset-purchase scheme.
Tokyo enjoyed an initial and brief surge after the announcement, jumping into positive territory, but it soon fell back as investors read the details.
The Nikkei index ended 0.35 per cent, or 37.81 points, lower at 10,709.93.
Seoul gained 0.49 per cent, or 9.66 points, to 1,996.52, while Sydney was flat, nudging up 1.6 points to 4,779.1.
Hong Kong was 0.29 per cent higher, adding 68.08 points, to 23,658.99 but Shanghai fell 0.56 per cent, or 13.08 points, to 2,315.14.
The Japanese central bank also lifted its growth forecast for the country’s economy, predicting gross domestic product would expand 2.3 per cent in the year ended March 2014, up from an earlier 1.6 per cent estimate.
Abe and his Democratic Party of Japan swept to power in the poll and has since moved to bring BoJ policies into line with his new government’s position.
Dealers have been betting on fresh easing by the bank to boost the economy, while there were also expectations it would fall into line with Tokyo’s inflation target demand.
The dollar and euro also enjoyed a quick surge against the yen but the advances were soon reversed.
In afternoon trade the dollar, which on Friday in New York hit 90.24 yen – its highest since June 2010 – bought 89.02 yen in Tokyo against 89.50 yen late in Europe Monday.
The euro bought 118.96 yen from 119.20 yen while the single currency bought $1.3358 against $1.3320.
US markets were closed on Monday for a public holiday.
Oil prices were mixed, with New York’s main contract, light sweet crude for delivery in February, rose 53 cents to $96.09 a barrel in the afternoon while Brent North Sea crude for March gained 33 cents to $112.02.
Gold was at $1,692.40 at 0830 GMT compared with $1,688.89 late Monday.