Asian Shares: Nikkei Touches Lowest Level in Over a Year -- Update
February 11 2016 - 8:44PM
Dow Jones News
By Kosaku Narioka and Chao Deng
Japanese stocks plummeted Friday morning, sinking to their
lowest level in more than a year as sharp declines overseas fueled
investor anxiety.
The benchmark Nikkei Stock Average was down 3.9% at 15117.70,
after a holiday on Thursday when most Asian shares were tumbled,
contributing to the global slump. Japan shares, down 10% for the
week so far, are on track for their worst weekly percentage
performance in nearly five years. The Nikkei's year-to-date decline
of 21% is almost as steep as the losses in China's mainland stock
market, the epicenter of the global stock-selloff at the start of
the year.
On Friday, the Hang Seng Index quickly followed the region's
declines at the open, last trading down 0.7% at 18467.91, its
lowest since mid-2012. Australia's S&P/ASX 200 was down 0.9%,
as was South Korea's Kospi.
"The leads for Asia have once again centered on European banks
and shenanigans in the oil complex," Chris Weston, chief market
strategist at brokerage IG in Melbourne, said.
The Federal Reserve's cautious stance on further rate increases
has raised doubts about the global economy and led to the Japanese
yen's sharp rise against the dollar, which has pummeled
expectations for the competitiveness of Japanese exporters and hurt
Japanese stocks. The dollar was last at 112.38 yen after falling to
Yen110.99 on Thursday, the lowest level since Oct. 31, 2014, when
the Bank of Japan shocked markets by boosting its current
bond-buying scheme.
Japanese Finance Minister Taro Aso said Friday morning the yen's
moves have been rough and that rapid moves in the foreign-exchange
market aren't desirable. He said he would watch foreign-exchange
markets with close interest.
The yen and government bonds tend to appreciate in times of
economic uncertainty. The benchmark 10-year Japanese
government-bond yield was flat at 0.005%.
Early weakness in Asia was tempered by some signs of stability
in U.S. stocks on Thursday, as they pared steep losses in
late-afternoon trading, as well as a surge in crude-oil prices,
which clawed back from a fresh multiyear low in after-hours
trading.
Sweden's central bank on Thursday cut its main interest rate
further into negative territory, a move judged more aggressive than
anticipated by markets.
Oil inflamed the wide equities selloff as crude prices settled
at their lowest levels since 2003 amid worries about growing
stockpiles in the U.S. and about financial markets. But oil staged
a recovery after U.S. prices settled down 4.5% at US$26.21 a barrel
overnight. Brent crude oil was last up 5.6% at $31.75 early in
Asia.
While there are worries that the world is headed for a systemic
banking crisis, the performance of financial stocks Friday morning
in Asia suggests skittishness was contained. On the Nikkei,
financials were down 2.5%, less than the broader market's decline.
In Australia, financial stocks fared a tad worse than the overall
market, down by 1%. The S&P ASX 200 entered a technical
bear-market earlier this week, marked by a 20% fall from its high
last year, but recovered 1% on Thursday as major banks
rebounded.
On Friday, materials and technology shares pulled down the
Japanese market, with each sector off about 4.5%. Fuji Heavy
Industries Ltd. plunged 6.6%, while Kawasaki Heavy Industries was
down 6.4%. Internet software firm Trend Micro Inc. sank 8.6%, the
worst performer on the Nikkei.
"Gone are the days where bad news was good as it portended of
more dovish central banks and more cheap money on offer," Australia
& New Zealand Banking Group said in a report to clients.
It said some of the anxiety was likely chalked up to delayed
disappointment in a testimony by Federal Reserve Chairwoman Janet
Yellen as she juggled recognizing strength in the domestic economy
and potential risks of heightened financial market volatility. On
Thursday, she said the U.S. central bank was studying the
feasibility of pushing short-term interest rates into negative
territory should it need to give the economy an added boost.
On Thursday, the Dow Jones Industrial Average declined 255
points, or 1.6%, to 15660. The S&P 500 fell 1.2% and the Nasdaq
Composite lost 0.4%. The Stoxx Europe 600 fell 3.7% to its lowest
close since 2013, and the U.K.'s FTSE 100 closed at its lowest
level since July 2012.
Investors sought safety, with U.S. government bonds, the yen and
gold surging. Gold futures jumped to settle at the highest level in
about a year at $1,247.80 a troy ounce overnight, but was last down
0.7% at $1,239 early in Asia.
Robb M. Stewart contributed to this article.
Write to Kosaku Narioka at kosaku.narioka@wsj.com and Chao Deng
at Chao.Deng@wsj.com
(END) Dow Jones Newswires
February 11, 2016 21:29 ET (02:29 GMT)
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