Asian Stocks Fall After BOJ Leaves Monetary Policy Unchanged

Japan Financial Markets

People are reflected on the electronic board of a securities firm in Tokyo.

Photographer: Shizuo Kambayashi/AP Photo
  • Shares slide in Tokyo market, led by brokerages and banks
  • Economists confounded as BOJ refrains from adding to stimulus

Asian stocks fell, led by a slump in Tokyo shares, after the Bank of Japan refrained from adding to its monetary policy stance when most economists were expecting further stimulus.

The MSCI Asia Pacific Index declined 0.2 percent to 130.99 as of 5:14 p.m. in Tokyo, reversing gains of as much as 1.6 percent. The measure dropped for a fifth day, set for the longest losing streak since January. Japan’s Nikkei 225 retreated 3.6 percent, the most since Feb. 12. Equity gauges in India, Malaysia, Taiwan and Thailand slid at least 1 percent.

“It’s a total shock,” said Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors Ltd., which oversees about $120 billion. “From currencies to equities to everything -- you can see the reaction in the markets. I can’t believe this. It’s very disappointing.”

The BOJ kept its bond-buying program at 80 trillion yen ($733 billion) a year and made no changes to its negative-interest rate or its program for purchasing exchange-traded funds. More than half the economists in a Bloomberg survey predicted more stimulus at Thursday’s meeting. The yen surged 2.9 percent against the dollar after the decision.

Japan’s core consumer price index sank last month by the most since April 2013, when BOJ Governor Haruhiko Kuroda launched his stimulus program, underscoring difficulties in breaking free of deflation, data showed Thursday. The nation’s stock market is closed Friday and May 3-5.

U.S. Futures

Futures on the Standard & Poor’s 500 Index reversed gains, declining 0.7 percent. The underlying stock gauge added 0.2 percent, climbing for a second day Wednesday as energy producers rallied after oil surged above $45 a barrel in a whipsaw session. Those gains helped to offset losses among technology companies after Apple Inc. tumbled the most since January as its results disappointed.

Nomura Holdings Inc., Japan’s largest brokerage, slumped 10 percent in Tokyo, while Mitsubishi UFJ Financial Group Inc. fell 6 percent.

Stocks had been higher in the morning session after the Federal Reserve calmed investors with a signal it will gradually increase U.S. interest rates.

Australia’s S&P/ASX 200 Index climbed 0.7 percent. Pacific Brands Ltd. surged 23 percent after U.S. clothing manufacturer Hanesbrands Inc. agreed to buy the Australian underwear maker in a deal valued at A$1.1 billion ($836 million).

South Korea’s Kospi index lost 0.7 percent. The Shanghai Composite Index fell 0.3 percent, while Hong Kong’s Hang Seng Index rose 0.1 percent and the Hang Seng China Enterprises Index of mainland firms listed in the city both rose 0.3 percent. Singapore’s Straits Times Index retreated 0.4 percent.

New Zealand’s S&P/NZX 50 Index rose 0.6 percent. The country’s central bank said it may need to cut interest rates further, after keeping borrowing costs unchanged Thursday, as slowing global economic growth and a strong currency prolong a period of low inflation.

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