ASIA MARKETS / Lighter after Fed and BoJ rate decisions | 17.09.20

TOKYO / SHANGHAI (Dow Jones) – The stock markets in East Asia and Australia were clearly in the red on Thursday. The targets from the USA are negative after the interest rate decision of the US Federal Reserve (Fed) was received with disappointment. The result of the interest rate meeting of the Bank of Japan (BoJ) on Thursday did not come as a surprise and is not able to change the mood on the stock exchanges in the region.

Following its interest rate meeting on Wednesday, the Fed confirmed that it would support the domestic economy and signal an interest rate of close to zero by 2023. For many market participants, a change in the text accompanying the interest rate decision came as a bit of a surprise. The Fed said it would keep the key interest rate close to zero “until the employment target is reached and inflation has risen to 2 percent and is on the way to rise moderately above 2 percent for some time”. Most economists had assumed the Fed would wait until November or December to make the change.

Fed chairman Jerome Powell stressed in his press conference that the central bank was ready to take theirs Monetary policy adapt in response to the risks. But he also pushed for further fiscal aid several times. The economic path depends on the pandemic, and the virus is weighing on the economy in the short and long term. Powell saw “downside risk” if fiscal aid to the economy continued to fail. In the US, Democrats and Republicans have still not been able to agree on this.

BoJ is more optimistic about the economic situation – stock market unaffected

The Japanese central bank reiterated its ultra-loose monetary policy stance and promised further easing if this were necessary. However, the BoJ also noted that the domestic economy is gradually picking up speed again after a difficult phase – caused by the corona pandemic. On previous occasions, the BoJ had described the economy as extremely difficult. In the market, however, the main interest is in the BoJ’s relationship with the new Japanese Prime Minister Yoshihide Suga, it is said. Suga is more inclined to regulatory restructuring than further monetary easing, especially in the event of a further appreciation of the yen.

The Nikkei 225 index does not react to the BoJ statements and is still 0.6 percent in the red. The renewed appreciation of the yen against the dollar is weighing on the Japanese stock market. The US currency had weakened in response to the Fed statements and had temporarily slipped below the 105 yen mark late Wednesday. The dollar is currently trading just above it.

The downward trend is even more pronounced on the Chinese stock exchanges. In Shanghai, the composite index fell 1 percent. In Hong Kong, the Hang Seng index is down 1.6 percent. Technology stocks in particular are being sold here after their US counterparts in the United States lost more than average on Wednesday. Tencent lost 2.0 percent and Xiaomi 5.9 percent. Alibaba surrender 2.1 percent.

On the Australian stock market, the S & P / ASX-200 fell 1.1 percent with the negative US targets. Surprisingly strong data from the Australian labor market are not supportive.

The South Korean leading index Kospi falls 1.3 percent. Index heavyweight Samsung Electronics is 2.3 percent cheaper. Automotive stocks, on the other hand, are on the buy list: Hyundai Motor up 1.6 percent and Kia Motors by 3.5 percent.

In Tokyo, however, automotive stocks are sold. The export-heavy sector is suffering from the strong yen. The stock of the supplier Denso is down 2.8 percent. Nissan fall 1.9 percent. The shares of the Japanese railway companies West Japan Railway and East Japan Railway recorded price losses of 4.5 and 3.7 percent. Both have announced losses and dividend cuts for the current financial year.

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Index (stock exchange) last +/-%% YTD end

S&P/ASX 200 (Sydney) 5.890,80 -1,10% -11,87% 08:00

Nikkei-225 (Tokio) 23.333,69 -0,60% -0,77% 08:00

Kospi (Seoul) 2.403,58 -1,35% +9,37% 08:00

Shanghai Comp. 3,251.47 -0.99% + 6.60% 09:00

Hang-Seng (Hongk.) 24,327.67 -1.61% -12.31% 10:00

Straits-Times (Sing.) 2.501,68 -0,14% -22,27% 11:00

KLCI (Malaysia) 1.520.81 -0.68% -3.62% 11:00

Forex last +/-% 00:00 Wed, 9:55 am% YTD

EUR/USD 1,1757 -0,5% 1,1815 1,1858 +4,8%

EUR/JPY 123,52 -0,4% 124,01 124,83 +1,3%

EUR/GBP 0,9098 -0,1% 0,9112 0,9198 +7,5%

GBP/USD 1,2922 -0,4% 1,2968 1,2891 -2,5%

USD/JPY 105,08 +0,1% 104,98 105,25 -3,3%

USD/KRW 1175,54 +0,2% 1173,08 1173,45 +1,8%

USD/CNY 6,7773 +0,3% 6,7548 6,7631 -2,7%

USD / CNH 6.7770 + 0.4% 6,7472 6,7605 -2.7%

USD/HKD 7,7501 -0,0% 7,7502 7,7501 -0,5%

AUD/USD 0,7265 -0,5% 0,7303 0,7323 +3,7%

NZD / USD 0.6688 -0.6% 0.6731 0.6733 -0.7%

Bitcoin

BTC / USD 10,904.76 -1.0% 11,013.76 10,891.01 + 51.2%

ROHÖL last VT-Settl. +/-% +/- USD% YTD

WTI/Nymex 39,57 40,16 -1,5% -0,59 -30,9%

Brent/ICE 41,69 42,22 -1,3% -0,53 -32,4%

METALS last previous day +/-% +/- USD% YTD

Gold (Spot) 1.940,89 1.963,20 -1,1% -22,31 +27,9%

Silver (spot) 26.80 27.33 -1.9% -0.52 + 50.2%

Platinum (Spot) 947.25 974.00 -2.7% -26.75 -1.8%

Kupfer-Future 3,02 3,06 -1,2% -0,04 +7,0%

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Contact the author: maerkte.de@dowjones.com

DJG / cln / ros

(END) Dow Jones Newswires

September 17, 2020 01:08 ET (05:08 GMT)

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