Asia report: Markets lower with Aussie interest rates on hold

Markets in Asia finished lower on Tuesday, with traders looking down under to somewhat dovish talk from the Reserve Bank of Australia.

Japan’s Nikkei 225 was down 0.91% to 18,810.25, with domestic stocks being pushed down by a stubbornly strong yen.
It was last 0.39% stronger against the greenback, at JPY 110.47 to the $1.

Major exporters - particularly carmakers - were on the receiving end of the yen, with Honda down 2.66%, Nissan off 2.89% and Toyota 1.03% softer.

Technology firm Toshiba plummeted 9.38%, after reports emerged on Monday that the company would miss its reporting deadline for a third time - having already shifted its target date for quarterly earnings twice.

South Korea’s Kospi index was off 0.3% at 2,161.10, while markets in China, Hong Kong and Taiwan remained closed for the Ching Ming Festival.

Oil prices were relatively stable during Asian hours, though they picked up in early European trading with Brent crude last up 0.45$ at $53.36 per barrel and West Texas Intermediate adding 0.46% to $50.47.

Australia’s S&P/ASX 200 lost 0.27% to 5,856.55, with most subindexes in the red, including the weighty financials sector which lost 0.65%.

All of the big four regional banks were lower, with Australia and New Zealand Banking Group down 0.44%, Commonwealth Bank of Australia falling 0.53%, National Australia Bank sliding 0.93% and Westpac 0.97% softer.

The country’s central bank kept its official cash rate on hold at a record low 1.5%, as it pointed to recent economic data as supporting the idea of moderate growth.

There remained concerns over a softening employment market, however, though the Reserve Bank also mentioned tighter lending rules being enforced by regulators, suggesting concern around an overheating housing market could be easing.

“There are some subtle signs that the Bank is becoming more concerned about the outlook for the labor market and underlying inflation, but less concerned about the housing market,” noted Capital Economics chief Australia economist Paul Dales.

“We think that shift has further to go and that it will prompt the RBA to cut interest rates to 1.0% by the end of the year.”
New Zealand’s S&P/NZX 50 was 0.3% higher at 7,244.64, with high-dividend stocks being rewarded by yield hunters, though volumes remained light.

Meridian Energy was the leader of the pack, adding 3.2%, while energy distributor Vector was up 1.6%.

The down under dollars were both weaker, with the Aussie retreating 0.7t6% to AUD 1.3248 against the greenback and the Kiwi weakening 0.55% to NZD 1.4335 to the $1.