Asian markets traded lower Wednesday, with investors slapping down Japanese stocks after the yen surged overnight.
Japan’s Nikkei Stock Average had thudded 1.8% lower by the end of the morning session, but it held on to the 13,000 level, trading at 13,072.61.
Other major indexes fell more modestly, with Australia’s S&P/ASX 200 down 0.9%, and South Korea’s Kospi losing 0.3%, while Singapore’s Straits Times Index and New Zealand’s NZSX 50 each lost 0.3%.
Markets in China — including those in Hong Kong and Shanghai — were closed for the Dragon Boat Festival.
Japan led the losses after the dollar fell by almost 2 full yen overnight, with the greenback sitting at ¥96.48 midday in Tokyo after buying more than ¥98 at Tuesday’s Japan stock close.
The dollar traded above ¥100 early last week but hasn’t moved above that level since Japanese Prime Minister Shinzo Abe announced a slate of economic reforms — referred to as the “third arrow” of his three-pronged push to revive the nation’s fortunes, along with fiscal stimulus and monetary easing.
Chapdelaine FX managing director Douglas Borthwick compared Abe’s campaign unfavorably with European Central Bank President Mario Draghi’s actions to combat the eurozone debt crisis.
“The ECB carries a bazooka into the currency wars, as Draghi pledges to do ‘whatever it takes,’ [while] Japan’s Prime Minister Abe is fighting with a bow and arrow,” he wrote Tuesday. “The market is taking the view that Japan may not have either the stomach or the capacity to follow through with Prime Minister Abe.”
The yen’s moves Tuesday prompted further misery for Japanese exporter shares Wednesday, with Sony Corp. down 3%, Renesas Electronics Corp. losing 4.3%, Toyota Motor Corp. and Nissan Motor Co. each down 3.2%.
Hitachi Ltd. managed brief morning gains after a Nikkei news report that the conglomerate had secured an order to supply trains for a light-rail project in Vietnam’s Ho Chi Minh City, but the shares ended the morning down 0.2%.
Among the few advancers, Panasonic Corp. added 0.7% after a separate Nikkei report that China’s Huawei Technologies Co. would double by value its procurement of parts from Japan over the next several years, with Panasonic as one of the beneficiaries.
Meanwhile, Tuesday’s losses on Wall Street — with a triple-digit loss for the Dow industrials and a 1% fall for the S&P 500 — helped weigh on financials around Asia.
In Tokyo, Mitsubishi UFJ Financial Group Inc.lost 3.6%, Dai-ichi Life Insurance Co. traded 4.6% lower, Daiwa Securities Group Inc. dove 4.2%, and Resona Holdings Inc. pulled back 4.5%.
Likewise, many Australian banks saw selling, with National Australia Bank Ltd. down 1.1%, Westpac Banking Corp. off 1.7%, and Australia & New Zealand Banking Group losing 1.2%.
Mining stocks also took a toll on the Sydney market after a decline in many commodity prices, with Fortescue Metals Group Ltd. down 1.8%, BHP Billiton Ltd. slipping 0.8%, and Newcrest Mining Ltd. off 1.3% after the gold producer told Australia’s securities exchange that it didn’t break any share-listing rules related to the timing of the company’s recent restructuring announcement.
Early weakness in Australia briefly sent the S&P/ASX 200 into a technical correction, defined as a 10% drop from the most recent high.
In South Korea, Samsung Electronics Co. pared its early-morning losses to trade down 0.1% in the midday. The shares dropped 2.5% Tuesday amid concerns over sales for its new Galaxy S4 smartphone.
Credit Suisse said it held the shares’ rating at outperform, and that the recent losses for Samsung offered a buying opportunity, according to Dow Jones Newswires.
