Asia report: Most markets fall as BoJ begins policy meeting

30th Jul 2024 09:36

(Sharecast News) - Asia-Pacific markets mostly declined on Tuesday as the Bank of Japan kicked off its two-day monetary policy meeting.

Investors were closely watching for potential changes in benchmark interest rates and the bond-buying programme.

Japan also released its unemployment rate for July, which came in slightly below expectations.

"Asian stock markets are trading mostly lower on Tuesday, as investors remain cautious ahead of key central bank policy meetings and upcoming earnings reports from major tech companies," said TickMill market analyst Patrick Munnelly.

Most regional markets finish trading in the red

In Japan, the Nikkei 225 saw a modest rise of 0.15%, closing at 38,525.95, while the Topix index dipped slightly by 0.19% to 2,754.45.

Among the top performers on Tokyo's benchmark were Okuma, up by 3.89%, Chugai Pharmaceutical, gaining 3.33%, and Omron, which rose by 2.97%.

Mainland China's markets struggled, with the Shanghai Composite falling by 0.43% to 2,879.30 and the Shenzhen Component declining by 0.54% to 8,468.58.

Linhai and Jiangsu Yueda Investment Co saw significant losses, plunging 8.36% and 8.02%, respectively, while Jack Sewing Machine Co dropped by 6.09%.

Hong Kong's Hang Seng Index experienced a substantial decrease, dropping 1.37% to 17,002.91.

Hang Lung Property led the losses with an 11.74% decline, followed by Zhongsheng Group at 7.04% and China Mengniu Dairy at 6.52%.

South Korea's Kospi index fell by 0.99% to 2,738.19.

Major decliners included Hyosung, which plummeted 9.21%, Hanmi Semiconductor down 6.33%, and Hanwha Systems, which fell by 5.96%.

In Australia, the S&P/ASX 200 dropped by 0.46% to 7,953.20.

Fortescue was the largest loser, with a 10.17% drop, after reports that nearly AUD 2bn of discounted stock was entering the market.

According to the Australian Financial Review, JPMorgan was seeking buyers for AUD 1.9bn of discounted shares in Fortescue, for an unnamed institutional investor.

The fall for Fortescue was followed by Arcadium Lithium, down 6.26%, and IGO, which decreased by 4.76%.

Contrasting the broader regional trend, New Zealand's S&P/NZX 50 rose by 0.63% to 12,391.05.

A2 Milk Company led the gains with a 4.04% increase, followed by Eroad up 3.88%, and Synlait Milk, which climbed by 3.45%.

In currency markets, the dollar was last up 0.56% on the dollar to trade at JPY 154.89, and it increased 0.02% against the Aussie to AUD 1.5273.

The greenback fell 0.32% on the Kiwi, however, to last change hands at NZD 1.6964.

Oil prices saw slight declines, with Brent crude futures last down 0.1% on ICE at $79.70 per barrel, and the NYMEX quote for West Texas Intermediate decreasing 0.15% to $75.70.

Bank of Japan kicks off meeting, unemployment falls slightly

In economic news, the Bank of Japan started its two-day monetary policy meeting on Tuesday, with significant anticipation surrounding potential adjustments to its monetary policy.

Economists surveyed by Reuters predicted that the central bank would increase its benchmark interest rate to 0.1%, a shift from the current range of 0% to 0.1%.

Additionally, the BoJ was expected to reduce its purchases of Japanese government bonds, signalling a potential tightening of its accommodative stance.

At the same time, Japan's unemployment rate saw a slight improvement in June, dropping to 2.5% from 2.6% in May.

The reading also came in just below the 2.6% forecasted by analysts, indicating a marginally stronger labour market than anticipated.

Reporting by Josh White for Sharecast.com.