Asia report: Markets mixed on central bank jitters

Markets in Asia finished mixed on Thursday, as traders continued to jitter about the direction of central banks ahead of key meetings and decisions, though volumes were lighter with China, Taiwan and South Korea all closed for public holidays.

In Japan, the Nikkei 225 was off 1.26% at 16,405.01, while the broader Topix index lost 1.04% to 1,301.11.

A stronger yen and growing uncertainty over the Bank of Japan’s monetary policy meeting next week was piling the pressure on stocks in Tokyo.

The yen was last 0.06% ahead on the greenback at JPY 102.37.

“Market sentiment is fragile ahead of the BoJ's comprehensive policy review,” said analysts at DBS Bank.

“[There is] a good chance that the BoJ will revise the composition of the QQE program, increase the flexibility in the scale/category of asset purchases, and delete the timeline for achieving the 2% inflation target.”

Finance shares fell in Tokyo as a result of the uncertainty, with Mitsubishi UFJ down 1.93%, Mizuho off 1.62%, Nomura Holdings losing 2.16% and SMFG closing 1.88% lower.

The major exporters also fell as the yen strengthened, with Nissan down 2.42%, Sony off 1.21% and Toyota 1.32% lower.

China’s traders spent the day off the floors and enjoying moon cakes for the Mid-Autumn Festival, as did those in Taiwan, while in Korea investors were enjoying the second of three days off for the holiday.

Hong Kong’s Hang Seng Index added 0.64% by the end of the day, to finish at 23,335.59.

Oil prices rose during Asian trading, having fallen in the US overnight, with Brent crude last up 0.56% at $46.11 per barrel and West Texas Intermediate adding 0.25% to $43.69.

The declines came after a fresh data dump from the Energy Information Administration, which showed that inventories of distillates - including heating oil and diesel - rose by 4.6 million barrels in the seven days to 9 September.

The increase was much higher than analyst expectations for a 1.5 million barrel increase.

Crude inventories told a different story, however, with a drawdown of 0.56m barrels a stark contrast to market expectations for a 3.8 million barrel increase.

In Australia, the S&P/ASX 200 added 0.23% to 5,239.86, though the energy subindex once again dragged behind the benchmark, finishing down 1.21%.

Of the major oil players, Oil Search lost 0.78%, Santos was down 2.85% and Woodside Petroleum finished 1.06% lower.

Fresh data from the Australian Bureau of Statistics showed the unemployment rate in the sunburnt country slipped to 5.6% on a seasonally-adjusted basis in August, from 5.7% in July.

The number of employed in Australia fell 3,900 month-on-month, however, widely missing the mark against analyst expectations for a gain of 15,000.

A number of analysts were notably unconcerned by the lacklustre employment data, however, with BNP Paribas saying the real risks facing Australia and its dollar remain external.

“While global long-end bonds recovered some ground Wednesday, taking some pressure of the Aussie, we expect steepening pressures to persist in the next few weeks, which should weigh on the risk environment and the commodity exporter currencies.”

New Zealand shares fell for their fourth straight day, with the benchmark S&P/NZX 50 dropping 0.2% to 7,196.24, and Steel & Tube Holdings ending up the worst performer, losing 7.5% during the session.

The down under dollars were mixed, with the Aussie last 0.14% stronger on the greenback at AUD 1.3372, though the Kiwi weakened by 0.23% and was last at NZD 1.3763 per $1.