Asia report: Markets retreat as investors watch Fed

In Japan, the Nikkei 225 finished down 0.94% at 16,498.76, with the yen strengthening against the greenback and putting pressure on equities.

The yen did weaken sharply after local markets closed, however, and was last off 0.42% at JPY 109.70 per USD.

Earlier in the day, Japan’s finance minister was quoted as saying that the pair moving five yen within two days would be a one-sided move, but that there were no government plans to devalue the yen sharply.

On the mainland, the Shanghai Composite lost 0.76%, finishing at 2,822.04, while the Shenzhen Composite closed down 0.9% at 1,804.60.

In Korea, the Kospi ended 0.9% lower at 1,937.68, while Hong Kong’s Hang Seng Index added 0.11% to finish at 19.830.43.

“The talk on the trading floors this morning centers on the limited moves in markets, although some will welcome this, notably the Fed who have had a hand in creating these conditions,” noted IG chief market strategist Chris Weston in the morning.

Oil prices fell during Asian trading, with Brent crude last down 0.35% at $48.18 per barrel and West Texas Intermediate losing 0.21% at $47.98.

Australia’s S&P/ASX 200 finished down 0.44% at 5,295.60, with the energy subindex dragging on the benchmark losing 1.28%.

Oil Search closed down 1.51% and Santos lost 1.88% by end of play.

Reserve Bank of Australia governor Glenn Stevens told the Trans-Tasman Business Circle that the Sydney-based central bank remained committed to flexible, inflation-targeting monetary policy.

In New Zealand, the S&P/NZX 50 lost 0.5% to close at 6,872.65, led lower by insurer Tower, which lost 11.9% after posting a wider first-half loss of NZD 8.7m.

Flag carrier Air New Zealand also continued its downhill tumble, settling down 2.8% to its lowest levels since November 2014.

Investors seemed to be airing their disapproval of the airline’s plans to sell its major stake in Virgin Australia - shares in the airline have lost 20% since the plans were signalled on 30 March.

The down under dollars retreated, with the Kiwi retreating 0.57% to NZD 1.4871 and the Aussie weakening 0.89% to AUD 1.3966.