Asia: Stocks down as yen rises after Fed meeting, China lower on IPOs

Dovish remarks from US Federal Reserve chairwoman Janet Yellen failed to help investor's sentiment in Asia.

Stocks were mostly down on Thursday, despite the Fed pointing to one or two rate rises before the end of this year.

“Last night’s Fed meeting proved to have something for everybody with a good number of policymakers expecting to see at least one and possibly two rate rises before the end of this year, according to the median 'dot plot' chart projections of the Fed funds rate,” said Michael Hewson, senior market analyst at CMC Markets.

The Shanghai composite index fell 3.68% as 11 companies launched initial public offerings (IPOs), which put pressure on liquidity.

Dieter Helm, author and fellow in economics at New College, University of Oxford, expressed deep scepticism at the NOC Congress on Wednesday about China’s current growth as well as future prospects.

“I genuinely believe that Chinese economic growth is in decline and see it averaging 3%," he said.

"Economic transition, which China was witnessing at the turn of century with burgeoning growth, had to end. However, China’s fallback to the norm would much more painful, especially for regional commodities exporters such as Australia.”

“Dispatch of commodities cargoes – from iron ore to natural gas – are not consistent with an economy that’s growing at 7% as we are told. With that, the so-called 'commodities supercycle' is well and truly over.”

In economic data published by the National Bureau of Statistics, house prices continued to decline in May but at a slower pace, at -5.7% from -6.1% a month earlier. This was the ninth negative month in a row.

Hong Kong's Hang Seng was also down 0.22%. Lawmakers voted against an electoral reform proposal which would allow its leader to be chosen by voters in direct elections.

However, democracy activists said the result was good news as the proposal was an attempt to bring "fake democracy" to the city, as the candidates would have been pre-selected by a pro-Beijin committee.

Japan's Nikkei 225 closed down 1.13% as Fed's remarks dented the dollar and strengthened the yen, which hurt exporters in the region. The Japanese currency was at ¥122.74 against the dollar.

The Bank of Japan would holding a policy meeting shortly with industry activity data on the agenda.

Elsewhere in Australia, the ASX index fell 1.26% on mixed metal prices. Aluminium was up 1.4% but copper, lead and zinc prices were down 0.4%, 0.6% and 1.1% respectively.

Australian iron ore exporter Rio Tinto said it expects demand for steel in China to be soft for several years.

In an article published by the company, chief executive Andrew harding said: "China's steel production has been much the same as last year. There is inventory in the housing sector that has to be run down, and that will lead to a few years of reduced consumption of new steel."

Still in corporate news, supermarket Woolworths continued to fall following news on Wednesday that its chief executive Grant O'Brien has resigned from his role. The group launched a strategic plan to grow the business, by cutting costs and improving customer service.