Asian stocks declined on Thursday, after the better-than-expected US labour data indicated the US economy was recovering and could direct the Federal Reserve (Fed) to begin tapering its stimulus program soon.
Stocks in Japan dropped to a two-week low, dragged down by the strong yen. While China’s stocks saw a string of declines during the session, with the mainland Shanghai Composite falling from its three-month high.
Asian Stocks – Japan
The Japanese Nikkei 225 continued to drop as it edged 1.50% lower to 15,177.49 points, while the Tokyo broader Topix index shredded 0.91% to 1,229.65 points. The Japanese yen continued to strengthen after dropping to a six-month low against the US dollar on Tuesday. The currency pair USD/JPY dropped 0.22% lower at ¥102.13 at the time of writing.
Property market developer, Tokyo Tatemono saw the most gains, soaring 4%. While parcel delivery services provider, Yamato Holdings dropped 5.2%.
Asian Stocks – China
Hong Kong’s Hang Seng lost 0.39% to 23,635.00 points and the mainland gauge in Shanghai declined 0.21% to 2,247.06 points on Thursday.
Standard Chartered is predicting the People’s Bank of China (PBoC) to increase the micro liquidity management, as the region’s stocks are preparing to restart initial public offering (IPO) listings.
“Given the availability of new liquidity management tools, we do not forecast an excessive rise in money-market rates in China when IPOs resume. We expect the average seven-day repo rate to be in the range of 4.7-5.2% in the second half of December and in January, before declining to 4.3-4.5% in February,” the research note from Wednesday stated.
“We believe the PBoC may increase micro liquidity management, for example via open-market operations, during the Lunar New Year period in order to avoid an excessive rise in money-market rates,” the note said.
“This may be similar to what was seen ahead of the September quarter-end, when the PBoC used unconventional open-market operations to smooth liquidity conditions amid concerns about the quarter-end following the June liquidity crunch.”
Sands China was the main mover of the session, as it gained 2.3%, while Belle International Holdings lost 2.4%.
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