Asia report: Markets lower as investors turn cautious

Asian markets ended Tuesday largely down, following on from weak performance in the US overnight, as investors appeared to turn to caution after the recent rally.

Japan's Nikkei 225 closed down 0.68% at 17,117.07. It had traded choppily into both positive and negative territories as the country's central bank revealed its latest monetary policy stance.

The Bank of Japan kept policy on course after its two day meeting. It maintained its commitment to raise the monetary base by JPY 80trn each year, and kept the rate it charges commercial banks on hold at 0.1%.

Against the greenback, the yen maintained its hold on the 113 mark following the central bank decision. It was last 0.63% stronger on the dollar, at JPY 113.1.

Large exporters in the island nation closed mainly down - Toyota lost 1.82% and Nissan was off 1.71%. Canon was the odd one out, however, managing to close 0.21% above the line.

The Nikkei reported Toshiba as being in the late stages of negotiations with Chinese appliance firm Midea Group to sell the majority of its whiteware subsidiary by the summer.

Toshiba shares gained on the news of the possible deal, worth tens of billions of yen, but gave those up to close 1.08% lower.

National Australia Bank currency strategist Rodrigo Catril said that, while Asian and European stocks extended their gains on Monday, US stocks turned to a more hesitant mood.

"This cautious mode had also been reflected in currencies, with the safe haven [yen] the only outperformer against the [dollar]," he noted.

Julius Baer's head of Asia research Mark Matthews said in the morning that, while the world economy looked the same as it did in mid-February, a number of assets were up by double digits.

"If you weren't bullish a month ago, you probably shouldn't get too bullish now," he warned.

Elsewhere, Hong Kong's Hang Seng Index closed lower by 0.72% at 20,288.77 and Seoul's Kospi finished down 0.12% at 1,969.97.

In China, the Shanghai Composite managed a gain of 0.17% to close at 2,864.25, having spent much of the day in the red. The Shenzhen Composite slid 0.92% to 1,729.07.

The People's Bank fixed renminbi 0.26% weaker early in the day, at CNY 6.5079 per dollar. By late afternoon, it was trading at CNY 6.5074 - the onshore yuan is permitted to trade at 2% above or below the loose peg.

Metal stocks were lower in China after prices retreated overnight. Copper futures in London had fallen 0.5%, with three-month aluminium down 1.2% and three-month nickel sliding 2.5%.

That led to losses for the Aluminium Corporation of China, down 2.02%; Baoshan Steel, falling 1.33%; and Shandong Jinling Mining, which slipped 3.97%.

In the antipodes, the S&P/ASX 200 slid 1.43% to close at 5,111.42. It was dragged by losses in energy and financials, down 3.55% and 1.39% respectively.

The Aussie dollar gained early in the day, but later gave that up and was last trading 0.65% weaker at AUD 1.3395 per US dollar. The earlier gains came after the Reserve Bank of Australia released its March meeting minutes, in which it said there were "reasonable prospects for continued growth in the economy" and left the cash rate unchanged.

Australia's big four banks - Australia and New Zealand Banking Group, Commonwealth Bank of Australia, Westpac and National Australia Bank - all closed down between 1.4% and 1.84%.

Resources producers were also lower after the drops in metal prices. BHP Billiton was down 3.44%, Rio Tinto by 3.37%, and South32 dipped 4.55%.

Oil prices retreated during Asian trading, after some significant drops in the US overnight over concerns about oversupply. Brent crude was last down 2.97% to $38.38 per barrel, and West Texas Intermediate was down 2.76% to $36.18.

There were reports during the day that analysts in the US were expecting crude inventories in the country to hit record hights for a fifth straight week, with Reuters reporting a forecast rise of 3.3 million barrels. That, combined with the news Iran would continue to increase output until it reached four million barrels per day, fuelled the oversupply fire.

That led to Australian energy stocks losing ground as well, with Santos down 3.26% and Woodside Petroleum off by 3.92%.

New Zealand's golden run continued, with the S&P/NZX 50 extending into a twelfth consecutive session of rises, and ninth consecutive fresh market high, closing up 0.2% to 6,577.83.

Local analysts put the rise down to investors looking for returns as interest rates in the country remained historically low. International casino operator SkyCity led the index, rising 4.9%, followed by transport group Freightways advancing 3.4%.

The exposed economy's currency retreated, however, and was last trading 0.47% weaker against the greenback at NZD 1.5052 per dollar.