Most Asian stock markets fell Monday as more downbeat data from China weighed on sentiment ahead of the release of key economic indicators later in the week.
The Nikkei 225 index fell 235.4 points, or 1.3%, to 17.645.11.
In Tokyo, the Nikkei extended losses into the close after comments by Bank of Japan Gov. Haruhiko Kuroda, who said inflation wouldn’t reach the BOJ’s 2% target without a further strengthening in the link between employment, wages and prices.
Kuroda reiterated that he expected the price target to be reached in the middle of next year, but said the central bank wouldn’t hesitate to act if it judged the overall price trend to be changing.
Kuroda had met with Prime Minister Shinzo Abe at the prime minister’s official residence early Friday afternoon to discuss Japan’s sputtering economy, prompting speculation that the central bank might implement additional easing and helping send share prices 1.8% higher.
Selling early Monday was partly driven by a reassessment of the prospects for further easing, said Soichiro Monji, general manager of economic research at Daiwa SB Investments.
Some see buying opportunities in Tokyo, where corporate earnings are at record highs. The Nikkei is near a bottom and a drop in commodity prices will provide a significant boost to the economy in the longer term, said Masayuki Kubota, chief strategist at Rakuten Securities.
Singapore’s FTSE Straits Times Index fell 1.4%, marking bear territory—defined as a 20% fall from a recent peak.
Stocks in Singapore, a commodities-trading hub, have come under fire as signs that China’s economy is slowing more quickly than expected have sent commodities prices tumbling. Earlier Monday, China reported that industrial profits in August suffered their biggest drop since October 2011.
On Friday, Singapore reported weaker-than-expected industrial production, as export sectors such as electronics continued to contract.
Export-driven firms that focus on offshore marine engineering and commodities were among Monday’s worst performers, with SembCorp Marine Ltd. down 3.9% and Noble Group Ltd. down 2.2%.
In Australia, meanwhile, investors picked up energy and banking stocks that were battered last week.
Leading gains, however, were shares in M2 Group Ltd. which rose 13% after it agreed to a merger with rival Vocus Communications Ltd. in a deal that would build Australia’s fourth-largest telecom company, with a market value of more than three billion Australian dollars ($2.1 billion U.S).
The deal marks the latest shakeup of the industry as smaller companies strive to break the dominance of Telstra Corp. over phone and Internet services, and as Australia continues to roll out a national broadband network.
Markets in Hong Kong, Taiwan and Korea were shuttered for holiday.
CHINA
The CSI 300 in Shanghai regained 10.8 points, or 0.3%, to 3,242.75
While Chinese shares eked out gains, low volumes signal investors remain uncertain, analysts say. Trading volume dropped to 404 billion yuan ($63.4 billion U.S.), the lowest since February, according to data provider Wind Information Co.
Outstanding margin loans totaled 581 billion yuan as of September 25, compared with the peak of 2.26 trillion yuan in June, according to Wind . China’s stock regulator previously demanded brokers to clean up all illegal margin loans accounts by the end of September.
Weak economic data also kept investors on the sidelines. Earlier Monday, Chinese officials reported industrial profits fell 8.8% in August from a year earlier, compared with the 2.9% on-year decline in July.
In other markets
In Singapore, the Straits Times Index docked 40.72 points, or 1.4%, to 2,791.92
New Zealand's NZX 50 gained 11.78 points, or 0.2%, to 5,899.13
Australia's ASX 200 Index recovered 71.38 points, or 1.4%, to 5,113.49
