Asian trading mixed after Fed ends emergency measures

TOKYO (AP) – Asian shares were mixed yesterday as sentiment was shaken by the United States (US) Federal Reserve’s announcement that it would end some emergency measures put in place last year to help the financial industry deal with the pandemic.

Meanwhile, the Turkish lira nosedived early yesterday, falling about 17 per cent, after the country’s president Recep Tayyip Erdogan, removed central bank head Naci Agbal from his post on Saturday. The currency was trading at about TRY7.8 to the dollar yesterday morning.

Agbal had been struggling to counter inflation by raising interest rates, while Erdogan contended that raising interest rates would contribute to inflation – contrary to economic experience and theory, Jeffrey Halley of Oanda said in a commentary. He replaced Agbal with a banking professor who has argued for lower interest rates.

The central bank had said tight monetary policy would be maintained until inflation, which has hit 15.61 per cent was brought under control. An increase in the key interest rate by 200 basis points to 19 per cent last week had pushed the lira higher.

“Turkey will be an interesting example of what emerging markets can expect if inflation fears rise markedly,” Halley said.

In Asian trading, Japan’s benchmark Nikkei 225 dropped 2.1 per cent in afternoon trading to 29,174.15. South Korea’s Kospi lost 0.1 per cent to 3,035.46. Australia’s S&P/ASX 200 gained 0.7 per cent to 6,752.50. Hong Kong’s Hang Seng shed 0.2 per cent to 29,941.21, while the Shanghai Composite jumped 1.1 per cent to 3,443.44.

Major Japanese stocks fell nearly across the board, including automakers like Toyota Motor Corp and Honda Motor Co, whose earnings get a boost from a healthy US economy. Toyota’s shares fell 3.3 per cent while Honda’s lost 3.6 per cent.

A man wearing a protective mask walks in front of an electronic stock board showing Japan’s Nikkei 225 index in Tokyo. PHOTO: AP