Stocks in Japan suffered their sharpest loss in three weeks on Wednesday as the yen strengthened against the U.S. dollar, but Shanghai’s benchmark bounced back from its worst drop in five years.
In Japan, the Nikkei 225 retreated 400.80 points, or 2.3%, to 17,412.58.
In Hong Kong, the Hang Seng index recovered 38.69 points, or 0.2%, to 23,524.52, after a bruising of more than 500 points Tuesday.
After recouping some of its losses early Wednesday in Tokyo, the U.S. dollar suffered a new bout of selling, ending the Tokyo trading session at 119.18 yen. Just two days prior, it fetched nearly ¥122.
A weaker dollar is bad for exporters, as they have less latitude to cut prices on goods they sell overseas, and don’t earn as much yen when then repatriate the profits back home.
Shares sensitive to the currency market underperformed the major indexes, beginning with car makers. Toyota lost 3.0%, Suzuki Motor fell 3.2%, and Fuji Heavy Industries gave up 4.3%.
Among heavily weighted stocks tied to futures arbitrage trading, e-commerce firm SoftBank booked its seventh straight loss, slipping 1.1%, while Uniqlo clothing chain operator Fast Retailing fell 2.3%.
Elsewhere, Australia’s S&P/ASX 200 was down. Consumer confidence slumped in December, in response to a sharp slowdown in the economy. The Westpac-Melbourne Institute consumer sentiment index fell by 5.7% in December from November to 91.1 points in a dire reading that may increase the chances of further rate cuts next year.
CHINA
Shanghai’s CSI 300 index regrouped 114.63 points, or 3.7%, to 3,221.55, in volatile trading after falling as much as 1.7% earlier in the day. The choppiness was a continuation of last week, when investors became concerned that stocks could be headed for a short-term correction.
The benchmark plunged as much as 6.1% in intraday trading Tuesday, following a surprise move by Beijing to rein in lending that fueled concerns about growth in the world’s number-two economy.
On Wednesday, inflation in China rose less than expected, providing policy makers room for further stimulus to support growth.
In other markets;
Singapore’s Straits Times Index gained 5.97 points, or 0.2%, to 3,325.81
The Taiex index in Taiwan lost 96.74 points, or 1.1%, to 9,032.16
Korea’s Kospi index dropped 25.39 points, or 1.3%, to 1,945.56
New Zealand’s Exchange 50 skidded 19.36 points, or 0.4%, to 5,523.58
Australia’s S&P/ASX 200 moved lower 23.67 points, or 0.5%, to 5,259.00
