By Laura He and Michael Kitchen, MarketWatch
HONG KONG (MarketWatch) -- Asian stocks closed mostly lower on
Thursday, after U.S. stocks broke a five-day winning streak
overnight.
Japan's Nikkei Average dropped 0.6% to its lowest closing level
in more than a week, while the yen (USDJPY) weakened against the
greenback, trading at Yen102.05 from Yen101.993 on Wednesday. The
broader Topix index inched down 0.1% at the close.
In Australia, the benchmark S&P/ASX 200 closed 0.5% lower,
after data showed the number of employed in Australia decreased by
4,800 in May. Economists polled by Dow Jones Newswires had expected
a gain of 10,000.
In mainland China, Shanghai stocks pulled back from their
highest settlement since late April in the previous day. The
Shanghai Composite Index snapped a three-day winning streak and
edged down 0.2%. Hong Kong's Hang Seng Index settled 0.4% lower, as
investors turned cautious before China released retail sales and
industrial output data on Friday.
Some market movers included Chinese dairy product maker China
Mengniu Dairy Co. , which fell 2.9% and Hong Kong property
developer Hang Lung Properties , which declined 1.7%. Rival
developer Cheung Kong (Holdings) dropped 1.2%, and Chinese online
major Tencent Holdings ended down 0.5%.
In Japan, top investment bank Nomura Holdings climbed 2.2%,
banking group Mitsubishi UFJ Financial Group rose 1%, while console
maker Nintendo and optics manufacturer Olympus Corp. each fell
1.5%.
New Zealand's NZX 50 index rose 0.3%, after the Reserve Bank of
New Zealand raised its benchmark Official Cash Rate to 3.25%, and
central bank Governor Graeme Wheeler said the Kiwi economy has
"considerable momentum." The New Zealand dollar (NZDUSD) advanced,
buying 86.71 U.S. cents from 86.12 U.S. cents in the prior
session.
Bank of Japan: Expect nothing
The Bank of Japan kicked off its two-day meeting Thursday, but
few economists expect any new actions just yet.
While there had been some talk of further easing after the April
hike to the consumption tax, the economy and markets haven't quite
gone off the cliff that some had feared.
As Crédit Agricole put it in a note out today: "Recent anecdotal
evidence suggests the economy has weathered the tax hike well, and
we think the BOJ will maintain its wait-and-see approach."
In fact, Crédit Agricole predicts no fresh policy moves "for the
foreseeable future," citing what its analysts see as a more upbeat
tone in recent Bank of Japan statements and reports.
"Indeed, in its communication, the BOJ highlighted the
diminished slack in the labor market as source of pressure for
inflation," while also indicating it's "pleased with the response
of the broader economy to the April tax hike," the bank says.
Then again, some economists do see central-bank action somewhere
not too far down the road. Capital Economics, for instance, is
tipping an October move "as it becomes clear that inflation
excluding the effects of the consumption tax hike will fall short
of the 2% target at the end of the year."
In fact, CapEcon sees the chance of more quantitative easing
even if inflation does build, given a downward pressure on prices
from some possible reforms.
Among the examples it cites: A Trans-Pacific Partnership deal
that results in lower food prices, and potential reforms to shore
up the labor market through more immigration or by encouraging more
women "to look for paid rather than unpaid employment, e.g. a more
favorable tax treatment and better access to child care."
China to lay down rules for online finance
The prospects for China's rapidly growing online financing
industry seemed a little more uncertain Thursday, as the country's
central bank announced a plan to tighten up oversight of the
sector.
The People's Bank of China (PBOC) issued its 2013 annual report
late Wednesday, warning about "increasing risks" in Internet
financing activities.
Under the order of the State Council (China's cabinet), the
central bank has been leading an effort to draw up "guidance" to
regulate the online financial industry, according to the
report.
"Internet financing companies often breach the existing
regulations and enter a legally grey area," the PBOC said.
"Sometimes they may have touched the 'bottom line' of illegal
fundraising and business operations."
In particular, the central bank pointed to "P2P"
(person-to-person) lenders, online credit platforms where borrowers
can get cash from individual lenders over the Internet. It said
risks can easily occur when some operators of P2P websites
misappropriate or even flee with clients money.
(Some material in this report is from MarketWatch's Asia Stocks
blog.)
More MarketWatch news:
Bank of Korea holds rates steady, but where next?
Japan's machine orders drop, but capex trend solid
Australia's unemployment rate holds steady
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