Asia: Most stocks affected by Swiss exchange rate cut decision

News that the Swiss National Bank (SNB) had dropped its exchange rate target dragged most Asian stocks into the red on Friday.

Japan's Nikkei-225 was down by 1.43% as the yen gained in strength against the dollar. The US currency fell to ¥116.3030, its lowest level since October of last year.

The decision to abandon a cap on the value of the exchange rate which had been set at 1.20 francs to the euro was felt far and wide across global capital markets.

“Today’s actions by the Swiss had the distinct look of someone jumping before they were unceremoniously pushed,” said IG analyst Alastair McCaig.

Hong Kong's Hong Seng also gave back ground, retreating by 1.02%.

HSBC said it was investigating reports that customers in Hong Kong managed to buy the Swiss franc below market rates, due to a technical glitch.

A source cited by the Apple Daily claimed to have purchased the Swiss currency at HK$8.26 per franc, when the market rate was between HK$8.80 to HK$9, while another customer claimed to have made a 21% profit on currency transactions.

Despite disappointing data from China, Shanghai Index was up 1.2% driven by optimism that the central bank will take more steps to bolster the country's economy.

Foreign direct investment came worst-than-expected at 10.3% in December, compared to 22.2% the month before and against 22.1% growth forecasts.

“Sentiment is still pretty good as the overall liquidity environment is adequate. The Swiss currency saga has very little impact on China’s stock market," Wang Zheng, chief investment officer at Jingxi Investment Management Co. told Bloomberg.