Stock markets in Asia-Pacific creaked to a higher close for the week after an early bout of currency market volatility following a decision by the U.S. Federal Reserve to keep rates unchanged.
However, Japan’s market swung to a loss for the week after the yen strengthened.
In Japan, the Nikkei 225 index dropped 362.06 points, or 2%, to 18,070.21, taking its losses for the week to 1.1%, while most shares elsewhere were up and currencies mixed.
Minutes released this morning from Japan’s central bank showed that its doubts about China grew in August:
In Hong Kong, the Hang Seng Index recovered 66.20 points, or 0.3%, to 21,920.83, up 1.9% for the week.
The Fed left short-term rates unchanged after weeks of market-churning debate at the central bank, as many investors had expected.
Still, the central bank noted its concerns about weakness in global economies and markets. Investors are looking to more volatility in the months ahead, given that an increase is still likely before the end of the year.
Some emerging-market central bankers even appeared frustrated with the Fed’s postponement.
Most Asian markets had done well in the recent lead-up to the Fed’s announcement, as expectations grew that it would push its first increase back to later in the year. China’s domestic market was the exception, as support from Beijing-backed funds became increasingly uneven.
Over a longer term, the region has struggled as investors grapple with the Fed’s thinking in the wake of a stumble in global financial markets and fresh signs of a slowing Chinese economy. Currencies have hit multiyear lows in Southeast Asia and stocks in China and Hong Kong are in bear markets.
Some investors expect Hong Kong stocks to benefit from the Fed’s delay after a lengthy period of underperformance relative to Chinese markets.
The benchmark, sometimes known as China’s NASDAQ for its preponderance of growth stocks, currently trades with a price-to-earnings ratio of 59.76 compared with the 7.09 multiple for the Hang Seng China Enterprises Index, a widely-tracked gauge of Chinese companies listed in Hong Kong.
Currency markets had a turbulent day. The U.S. dollar fell against the Japanese yen overnight to as low as ¥119.64, before a modest recovery. That soon gave way and the yen strengthened to as much as ¥119.3450 late Friday in Asia. The yen is considered a haven and strengthens when investors turn cautious.
The Australian dollar was up 0.7% against the U.S. dollar, but the South Korean won fell slightly.
CHINA
The CSI 300 in Shanghai eked up 14.27 points, or 0.4%, to 3,251.27
China’s securities regulator said yesterday that trust companies can negotiate with brokers on the status of their trading accounts, lifting some worries that authorities are aggressively clearing all illegally leveraged-up accounts.
In other markets
In Korea, the Kospi index gained 19.46 points, or 1%, to 1,995.95
In Singapore, the Straits Times Index slid 16.22 points, or 0.6%, to 2,879.59
In Taiwan, the Taiex index added 16.64 points, or 0.2%, to 8,462.14
The NZX 50 picked up 17.82 points, or 0.3%, to 5,712.05
The ASX 200 Index advanced 23.68 points, or 0.5%, to 5,170.50
