Asia report: Markets mixed as RBA says bond buying will continue

Equity trading in the Asia-Pacific region finished in a mixed state on Tuesday, as central bankers in Australia indicated they would continue their bond purchasing for the time being.

In Japan, the Nikkei 225 was up 0.96% at 29,441.30, as the yen eked out gains of 0.01% on the dollar, last trading at JPY 110.06.

Robotics specialist Fanuc was up 0.44%, while among the benchmark’s other major components, Uniqlo owner Fast Retailing was down 0.32% and technology giant SoftBank Group lost 0.17%.

The broader Topix index advanced 0.8% by the end of trading in Tokyo, closing at 1,975.48.

On the mainland, the Shanghai Composite was down 0.92% to 3,556.56, and the smaller, technology-centric Shenzhen Composite was 0.82% weaker at 2,387.91.

South Korea’s Kospi managed gains of 0.2% to 3,258.63, while the Hang Seng Index in Hong Kong was down 0.71% at 28,638.53.

The blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 0.5% and SK Hynix 1.18% firmer.

“Asian shares were a mixed bag this morning even after Wall Street closed at record highs overnight,” said FXTM senior research analyst Likman Otunuga.

“Caution will most likely remain a key theme as investors wait for this week’s FOMC meeting for clues on future monetary policy.

“Although the Fed is widely expected to leave interest rates and policy measures unchanged, all eyes will be on the statement language, updated economic projections and chair Jerome Powell’s post-meeting press conference.”

Otunuga said the Fed had managed to persuade markets that the current jump in inflation was transitory, but how long they could keep that mantra was coming into question.

“Ahead of the Fed’s highly-anticipated policy meeting, investors may direct their attention towards a slew of data from the United States which may provide more clues on how the economy is faring.”

Oil prices were higher as the region went to bed, with Brent crude last up 0.59% at $73.29 per barrel, and West Texas Intermediate rising 0.58% to $71.29.

In Australia, the S&P/ASX 200 was 0.92% firmer at 7,379.50, as investors there digested the minutes of the Reserve Bank of Australia’s monetary policy meeting for June.

The bank’s members agreed that even considering easing or ending the country’s bond purchasing programme was “premature” at the current stage.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 jumped 1.07% to 12,696.39, led higher by medical devices company Fisher & Paykel Healthcare, which surged 5.6%.

The moves for Fisher & Paykel were driven by an announcement from its Dutch competitor Koninklijke Philips, which said it was recalling between four and five million sleep apnea devices due to potential health risks associated with a polyester foam.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.28% at AUD 1.3004, and the Kiwi retreating 0.14% to NZD 1.4023.