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Asia-Pacific markets dropped after the Bank of Japan adjusted its yield curve management limit value and continued to maintain its ultra-low benchmark interest rates.
The Nikkei 225 dropped 2.55%, leading losses in the area, and the Topix dropped 1.6% in the afternoon session. The Japanese yen gained more than 2% versus the US dollar, staying at its highest level in five months.
The Kospi from South Korea dropped 0.92%, although the S&P/ASX 200 in Australia dropped 1.5%.
The Hang Seng index in Hong Kong dropped 1.36%, pushed down by technology and real estate firms. The Shenzhen Component lost 1% and the Shanghai Composite dropped 0.64% in china as the People’s Bank of China maintained its benchmark loan rates.
Overnight in the United States, stocks on Wall Street dropped for the fourth consecutive day, as fears of an incoming recession outweighed hopes of a year-end rally.
“The change is aimed at improving the functioning of the financial markets. It is not a response to any change in Japan’s economic fundamentals,” says Takashi Miwa, the head of Japan economic research at Nomura.
