Asia report: Markets mixed as RBA opens door to interest rate movement

Markets in Asia finished in a mixed state, as investors digested freshly-released minutes from the Reserve Bank of Australia which suggested the central bank was willing to adjust interest rates if economic conditions required it.

In Japan, the Nikkei 225 was down 0.69% at 21,535.25, as the yen weakened 0.04% against the dollar to last trade at JPY 107.95.

Of the major components on the benchmark index, automation specialist Fanuc was down 1.51%, fashion firm Fast Retailing lost 0.49%, and technology conglomerate SoftBank Corporation slid 1.2%.

The broader Topix index fell 0.48% to end its trading day at 1,568.74, as Tokyo’s markets returned from a public holiday on Monday.

On the mainland, the Shanghai Composite lost 0.16% to 2,937.62, and the smaller, technology-heavy Shenzhen Composite slipped just 0.03% to settle at 1,571.81.

South Korea’s Kospi was ahead 0.45% at 2,091.87, while the Hang Seng Index in Hong Kong rose 0.23% to 28,619.62.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics up 0.86% and chipmaker SK Hynix down 0.13%.

Leading the business pages on the Korean peninsula was Bank of America Merrill Lynch’s South Korean branch, which was told it was being fined KRW 175m ($0.15m) by the Korea Exchange for irregular trading.

Oil prices were higher as the region went to bed, with Brent crude last up 0.33% at $66.70 per barrel, and West Texas Intermediate rising 0.35% to $59.79.

In Australia, the S&P/ASX 200 slipped 0.18% to close at 6,641.00.

Major miner Rio Tinto was down 0.64% in Sydney trading, after the company reported a delay and a cost blowout at its underground copper mine in Mongolia.

The firm also said iron ore shipments were down 3.5% in the second quarter, which it put down to cyclone-related disruptions earlier in the year.

During the Sydney session, the Reserve Bank of Australia released the minutes of its monetary policy meeting in July, which showed it was prepared to move on interest rates if necessary.

“The board would continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time,” the minutes read.

“Lower interest rates would provide more Australians with jobs and assist with achieving more assured progress towards the inflation target.”

London Capital Group senior market analyst Ipek Ozkardeskaya said the RBA would be watching developments in China carefully, given the close ties between the two economies.

“Stocks in Australia treaded water, even though the Reserve Bank of Australia meeting minutes showed that policymakers are ready to pull the interest rates lower to boost growth as the slowdown in China, Australia’s largest trading partner, weighs on its economy.”

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.1% at 10,651.20, led lower by airport operator AIAL, which was off 2.3%.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.21% at AUD 1.4236, and the Kiwi retreating 0.02% to NZD 1.4886.