Asia report: Markets mixed as BoJ meeting continues

In Japan, the Nikkei 225 lost 1.13% to 16,476.84, while the Topix lost 1.11% to 1,307.00.

The Bank of Japan began its two-day meeting on Thursday, with analysts expecting the central bank to announce new stimulus measures.

Such measures could include lowering interest rates further into the negatives, or expanding the BoJ’s asset purchasing programme.

“If the BoJ decides to act this week, they could expand the quantitative and qualitative easing (QQE) program or decide to reinvest maturities. If nothing happens this week, we expect the BOJ will act definitively in September,” said US Bank Wealth Management head of fixed income research Jennifer Vail.

Markets were also still digesting Wednesday’s reports that Japanese Prime Minister Shinzo Abe is preparing a JPY 28 trn stimulus package, which would exceed earlier estimates by almost JPY 20trn.

“The timing of this chatter was likely done purposely ahead of the BoJ meeting where [BoJ governor] Kuroda can have an idea of how much more paper he gets to now buy,” noted Lindsey Group chief market analyst Peter Boockvar.

Against the greenback, the yen was stronger during morning trading before retreating later on.

It was last 0.36% stronger at JPY 104.74 per $1.

In corporates, Nintendo continued its downward slide, losing 5.49% by the time Tokyo closed, having announced its most recent earnings after markets ended on Wednesday.

On the mainland, the Shanghai Composite was up 0.1% at 2,994.97, while the Shenzhen Composite fell 0.15% to 1,950.99.

Markets in the People’s Republic were mixed, after they sold off on Wednesday amid rumours that Beijing was looking into restricting unreasonably risky wealth management products.

It’s understood draft rules from the China Banking Regulatory Commission were targeting riskier assets, which in China are frequently sold as part of a high-yield wealth management product by small banks and other institutions.

Korea’s Kospi closed down 0.2% at 2,021.10, while Hong Kong’s Hang Seng Index was off 0.2% at 22,174.34.

On the Korean corporates front, Samsung Electronics closed down 1.31% after posting its second quarter earnings before markets opened.

The smartphone and technology giant reported a KRW 2.4 trn rise in revenue for the quarter to 30 June, to KRW 50.94 trn, while operating profit improved KRW 1.24 trn to KRW 8.14 trn.

One of Samsung’s biggest local rivals LG Electronics also posted quarterly numbers, with its operating profit more than doubling year-on-year to KRW 584.6bn.

Its mobile communications division slipped up, however, to an operating loss of KRW 153.5bn year-on-year, with smartphone sales dropping 1%.

Oil prices were lower during Asian trading, with Brent crude last down 1.23% at $42.94 per barrel, and West Texas Intermediate losing 0.43% at $41.74.

In Australia, the S&P/ASX 200 finished up 0.31% at 5,556.60, with the materials subindex ahead by 1.48%.

Shares in BHP Billiton closed up 0.55%, despite reports that the company is looking at a charge in the billions of dollars for the Samarco dam disaster last November.

Elsewhere in the sector, Fortescue Metals added 4.76% and Rio Tinto was up 2.1%.

Markets in New Zealand also ended higher, with the S&P/NZX 50 adding 0.1% to 7,306.34.

It was led higher by luxury honey exporter Comvita, which saw its stock rise 4.1% during the session as investors went bargain-hunting after a recent fall.

Both of the down under dollars were stronger against the greenback, with the Aussie last 0.53% closer to at AUD 1.3278 per $1 and the Kiwi ahead by 0.22% at NZX 1.4100.