Asia: Stocks fall as Bank of Japan, Fed keep policy unchanged

Stocks in Asia fell on Thursday after the US Federal Reserve left open the chance of an interest-rate hike as early as June following its two-day monetary policy meeting.

The US central bank indicated it will raise rates soon as long as the economy continued to grow. The statement said the slowdown in economic growth was “transitory” and said it expects inflation to gradually rise towards 2% over the medium-term.

"As always, people are going to drill into the statement and interpret it in whatever way supports their own particular views," said Craig Erlam, senior market analyst at Oanda.

"This month’s statement makes that very easy because the more dovish among us will focus on the acknowledgement that growth slowed in the winter months and inflation continues to run below the longer term objective."

The Nikkei 225 plunged 2.69% after the Bank of Japan decided to keep policy unchanged. The central bank cut its inflation and economic growth forecasts for the year.

The consumer price index (CPI) is expected to rise by 0.8%, against from previous forecasts of 1%.

However, industrial production improved in March to -0.3% from -3.1% the month before, beating expectations of a decline of 2.3%.

Housing starts also rose to 0.7% from a decline of 3.1% in February.

Stocks in China were also down, with the Shanghai composite index losing 0.78% and Hong Kong's Hang Seng down 0.94%.

Barclays said on Thursday in a note for clients that Chinese government spending on infrastructure was a key factor driving fresh demand for several commodities such as copper. The bank pointed to around 300 infrastructure projects valued at $1trn proposed this year alone by Beijing. However, Barclays analysts also opined that it was too early to predict whether the rally would hold.

In corportate news, China Construction Bank fell 1.86% and the Industrial and Commercial Bank of China lost 2.17% after reporting the slowest first quarter growth in 8 years.

Elsewhere in Japan, Takeda Pharmaceutical, was down 2.13% after it said it expects a full-year loss following a settlement of $2.4bn in a US lawsuit. The company was accused of hiding cancer risks in its diabetes drug Actos.

Meanwhile, Australia's ASX continued to be on the red by 0.83% one day after Goldman Sachs warned the country's AAA credit rating is at risk. The investment bank said the country could see its rating be downgraded by Standard & Poor for the first time since 1989 due to its "poor fiscal performance".