Shares in Asia were largely lower at close on Wednesday as a stronger yen limited foreign interest in Tokyo stocks, while Japan’s stimulus package drew a mixed investor response.
What transpired in Japan?
The Nikkei 225 (INDEXNIKKEI:NI225) pulled back 1.88%, a sign that investors felt disappointed by the stimulus package approved by the administration of Prime Minister, Shinzo Abe. Only a tiny fraction of the nearly $277 billion stimulus package is new spending.
Fear appears to be spreading among Asian traders that less robust stimulus measures could be the region’s economy in state of economic uncertainty over a prolonged period. Japan’s less than expected fiscal stimulus comes after the country’s central bank failed to roll out bolder quantitative easing measures as had been expected.
Investors seem to Bank of Japan’s accelerated purchase of bonds would be enough to spur growth. A stronger dollar has also added to the complex story because it is making Japanese exports more expensive, thus undoing the benefits of monetary easing.
In Taiwan, the Taiwan Weighted declined 0.74%, while in South Korea the KOSPI pulled back 1.2%.
Stocks in Australia also closed lower only a day after the country’s central bank cut borrowing rates to an all-time low of 1.5%. The S&P/ASX 200 declined 1.35%.
China bucks broader Asian trend
But Chinese stocks managed to push back against the broader equity trend across Asia. The Shanghai Composite rose 0.22%, supported by upbeat real estate data and fresh call by a powerful body in the country for more favorable interest rates to spur growth.
However, Hong Kong’s smaller HANG SENG INDEX (INDEXHANGSENG:HSI) fell 1.76%.
Weakening sentiment
The losses in Asia follow overnight equity losses in the U.S. as the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) entered its longest stream of session losses since August 2015.
Weaker prices of the U.S. crude oil and mixed corporate earnings have been cited as some of the reasons for the lower investor appetite for stocks. Reports of U.S. oil inventory build-up and Nigeria’s efforts to reach a ceasefire with militants in its oil belt have triggered fears of a fresh round of crude oil price collapse because of increased supply of the commodity in the global market.
