Asia markets closed mostly lower on Tuesday, with Australian shares falling despite another interest rate cut from the Reserve Bank of Australia, while the yen climbed after Japan's cabinet approved the government's stimulus package.
The Nikkei 225 dropped 244.32 points, or 1.5%, to 16,391.45, ahead of the release of further details on Japan's hefty fiscal stimulus plan announced last week.
In Japan, the government approved 13.5 trillion yen ($132.04 billion U.S.) in fiscal measures, with 7.5 trillion yen in spending by the national and local government, reported Reuters. The measures were part of Prime Minister Shinzo Abe's 28-trillion-yen fiscal stimulus package announced last week in a bid to boost the country's moribund economy.
After the stock market closed and the stimulus package was approved by the cabinet, the Japanese yen strengthened against the dollar, with the currency pair dropping as low as 101.55 from levels as high as 102.81 earlier. The dollar/yen was at 101.77 U.S. as of late afternoon. That's down from levels between 104 and 106 last week before the Bank of Japan announced a smaller-than-expected monetary stimulus.
Markets in Hong Kong did not open Tuesday, due to a typhoon warning.
In Australia, shares did not move sharply after the decision as the market may have already priced a rate cut into stocks, with the stock index up more than 6% since the beginning of July.
The energy sub-index closed down 3.2%, likely on the back of lower oil prices overnight, when U.S. crude futures slipped below $40 U.S. a barrel for the first time since April.
The Australian dollar, which fell after the RBA cut its key cash rate by 25 basis points to a fresh record low of 1.5%, pared its losses against the greenback by evening local time. The Aussie traded as low as $0.7495 U.S. after the decision, compared with $0.7544 just before the RBA released its statement. As of late afternoon, the Aussie traded at $0.7546.
RBA Governor Glenn Stevens said in his policy statement that the global economy was growing at a lower-than-average pace, with conditions becoming more difficult for several emerging market economies.
Stevens added that subdued growth in labour costs and very low cost pressures around the world is expected to keep domestic inflation low.
Elsewhere, data released by the Australian Bureau of Statistics showed Australia's seasonally adjusted trade deficit for June came in at 3.19 billion Australian dollars ($2.4 billion U.S.), compared with the A$2-billion deficit estimated by a Reuters poll.
Australia's seasonally adjusted exports slipped 1% on-month, while imports climbed 2% for the same period.
In other markets
The Shanghai CSI 300 moved up 12.24 points, or 0.4%, to 3,189.05
The Taiex Index in Taiwan lost 11.95 points, or 0.1%, to 9,068.76
In Singapore, the Straits Times Index shed 35.85 points, or 1.2%, to 2,856.67
In Korea, the Kospi doffed 10.58 points, or 0.5%, to 2,019.03
In New Zealand, the NZX 50 docked 27.44 points, or 0.4%, to 7,329.20
The ASX 200 jettisoned 46.85 points, or 0.8%, to 5,540.54
