Asian Markets Lower as BOJ Stands Pat; Yen Jumps

MANILA, Philippines (AP) -
A man walks past an electronic board showing Japan's Nikkei 225 outside a brokerage in Tokyo, Japan January 12, 2016. Japan's Nikkei fell 2.7 percent after a market holiday on Monday, closing at its lowest in nearly a year, while U.S. stock mini futures were in the red pointing to a weak start.     REUTERS/Toru Hanai
A man walks past an electronic board showing Japan’s Nikkei 225 outside a brokerage in Tokyo. (Reuters/Toru Hanai)

Asian markets were mostly lower Thursday and Tokyo’s benchmark dropped as the yen surged against the U.S. dollar after the Bank of Japan chose to keep its monetary easing policies unchanged.

Japan’s Nikkei 225 fell 3.1 percent to 15,434.14. Hong Kong’s Hang Seng index sank 2.1 percent to 20,038.13. China’s Shanghai Composite Index is down 0.4 percent at 2,875.35. Australia’s S&P ASX 200 was nearly flat at 5,146.00 and South Korea’s KOSPI slid 0.9 percent at 1,951.99. The Philippines Stock Southeast Asian bourses were also lower.

Japan’s central bank once again foiled speculation it might further ease monetary policy to help the faltering recovery. The Bank of Japan is pumping about 80 trillion yen (about $769 billion) into the economy each year with purchases of Japanese government bonds and other assets. Meanwhile, Japanese officials warned they may have to intervene if the yen jumps too much. A stronger yen, which hurts profits of exporters, tends to pull share prices lower.

The stock market fell for a fifth straight day Wednesday as investors set aside the Federal Reserve’s interest rate decision and remained focused on next week’s vote on whether Britain will remain in the European Union or opt for a Brexit from the EU. The Dow Jones industrial average fell 34.65 points, or 0.2 percent, to 17,640.17. The Standard & Poor’s 500 index fell 3.82 points, or 0.2 percent, to 2,071.50 and the Nasdaq composite fell 8.62 points, or 0.2 percent, to 4,834.93.

“The U.S. Federal Reserve declined to lift interest rates at this month’s meeting, explicitly adding to investor fears around a potential Brexit,” said Michael McCarthy, chief market strategist at CMC Markets.

The Federal Reserve said Wednesday it is keeping interest rates unchanged in light of an uncertain job market, offering no hints of when its next rate hike might occur. With the jobs situation and Britain’s status obscuring the outlook, the Fed said in a statement that it needs a clearer economic picture before resuming the rate hikes it began in December.

U.S. crude lost 44 cents at $47.56 a barrel in electronic trading on the New York Mercantile Exchange. It fell 48 cents and closed at $48.01 on Wednesday. Brent crude, used to price international oils, shed 42 cents at $48.55. Its price fell 86 cents on Wednesday, when it closed at $48.97 a barrel in London.

The dollar fell to 104.09 yen from 105.98 the previous day. The euro rose to $1.1283 from $1.1268.