Asia report: Stocks mixed as BoJ maintains super-easy policy

Stocks closed in a mixed state in Asia on Friday, with Japan’s top-flight index losing almost 2% as investors weighed renewed global recession fears.

In Japan, the Nikkei 225 was down 1.77% at 25,963.00, as the yen weakened 1.95% against the dollar to last trade at JPY 134.79.

Technology conglomerate SoftBank Group tumbled 4.24%, while among the benchmark’s other major components, automation specialist Fanuc was up 2.09% and fashion firm Fast Retailing was ahead 0.54%.

The broader Topix index was 1.71% weaker byt the end of trading in Tokyo, settling at 1,835.90.

In central bank action, the Bank of Japan stood pat on its very easy monetary policy earlier in the day, in stark contrast to the interest rate rises seen from many of its counterparts earlier in the week.

Craig Botham at Pantheon Macroeconomics noted that BoJ governor Haruhiko Kuroda “brought out all the classics” in his press conference, reiterating the importance of wage gains in making inflation sustainable, and committing to support the economy with monetary easing in the meantime.

“Inflation and growth remain the focus for the BoJ, regardless of the pressure on the yen and JGBs; for Kuroda, monetary policy is aimed at stabilising prices, and not currency.

“Further easing remains an option, if required.”

Botham said the potential for currency intervention had risen, but he did not think changes to yield curve control would be part of the toolkit, given an “unattractive trade-off” for the central bank.

“The main risk really comes from external factors, as with the recent surprise shift from the Fed.

“But absent another such surprise, we think the BoJ should be able to maintain its current stance this year.

“If we are wrong, any shift in YCC would need to be preceded by direct foireign exchange intervention, at the behest of the Ministry of Finance, and some commentary regarding a review of yield curve control, so we should not be completely blindsided.”

On the mainland, the Shanghai Composite was 0.96% firmer at 3,316.79, and the Shenzhen Component was 1.48% higher at 12,331.14.

South Korea’s Kospi was 0.43% lower at 2,440.93, while the Hang Seng Index in Hong Kong gained 1.1% to 21,075.00.

Seoul’s blue-chip technology stocks were in the red, with Samsung Electronics down 1.81% and SK Hynix losing 1.03%.

Oil prices were firmer as the region entered the weekend, with Brent crude futures last up 0.83% on ICE at $120.80 per barrel, and West Texas Intermediate rising 0.62% on NYMEX to $118.32.

In Australia, the S&P/ASX 200 slid 1.76% to 6,474.80, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.54% to 10,589.19.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.75% at AUD 1.4298, and the Kiwi retreating 0.42% to NZD 1.5784.

Reporting by Josh White at Sharecast.com.