By Laura He and Michael Kitchen, MarketWatch
HONG KONG (MarketWatch) -- Asia stocks closed mixed on
Wednesday, with Japan down after the Bank of Japan kept its
monetary policy on hold.
The Nikkei Average settled 0.2% lower, and the Topix Index
dropped 0.3%. The yen (USDJPY) advanced against the greenback,
trading at Yen100.92 from Yen101.258 in the prior session.
Earlier, the Bank of Japan maintained its monetary easing
programs and said Japan's economy continued to recover
moderately.
South Korea and New Zealand markets also lost ground, down 0.2% and 0.5%, respectively.
However, the Shanghai Composite Index finished 0.8% higher, and
Australia's S&P/ASX 200 moved up 0.1%. The Australian dollar
(AUDUSD) weakened, down to 92.32 U.S. cents from 92.37 U.S. cents
on Tuesday. Hong Kong's benchmark Hang Seng Index was up a modest
1.8 points at 22,836.52.
Among the market movers, construction-equipment maker Komatsu
fell 3.1%, semiconductor manufacturer Toshiba Corp. retreated 2.8%,
auto maker Mazda Motor lost 2.4%, and electronics giant Sharp Corp.
declined 1.5%.
In Hong Kong, index heavyweight HSBC Holdings ended 2% lower, as
the stock traded without dividend rights on Wednesday. A day
earlier, European Union regulators charged HSBC and other two banks
for suspected operation of an illegal cartel to rig interest
rates.
However, Chinese computer maker Lenovo Group rallied 3.4%, after
it reported a 25% profit jump for the quarter ended March. Other
top gainers included Bank of China , up 1.4%, China Minsheng
Banking Corp. , up 1.4%, and China Construction Bank Corp. , up
1.3%.
Bank of Japan still frozen on policy
Another Bank of Japan meeting has come and gone with no action
from the board.
As widely expected, there was no change to the central bank's
easing programs. But at least it did offer some details on its
current outlook, as opposed to last meeting's incredibly short
statement (as mentioned in a previous Asia Stocks blog).
Specifically, the central bank said today that "business fixed
investment has increased moderately as corporate profits have
improved," but "public investment has more or less leveled off at a
high level."
On the back of today's data showing a wider-than-expected trade
deficit, the Bank of Japan also said that "overseas economies --
mainly advanced economies -- are starting to recover, although a
lackluster performance is still seen in part. Exports have recently
leveled off, more or less."
As for the market reaction, the yen briefly dipped as investors
(and computer algorithms) attempted to find anything tradeable in
the statement. The dollar rose to Yen101.37 from Yen101.30, before
heading to other way to trade at Yen101.27.
Japan's trade deficit narrows by less than expected
Japan's exports growth in April has beaten expectations, but so
too have its imports, resulting in a wider-than-expected trade
deficit.
Specifically, exports rose 5.1% from a year earlier,
accelerating from March's 1.8% increase in outbound trade and
beating economists' consensus as reported by Dow Jones Newswires
(up 4.2%) and Reuters (up 4.8%).
The result got a boost from an almost 10% rise in shipments to
China, even as exports to the U.S. rose by just shy of 2%.
On the import side of the ledger, April's total was 3.4% higher
than the year-ago period, less than March's 18.1% surge for sure,
but above a Reuters forecast for a 0.8% gain.
And that put the trade deficit at 808.9 billion yen ($7.99
billion), wider than the Yen646 billion projected in the Reuters
and Dow Jones surveys. And while it marked a narrowing from the
previous month's Yen1.45 trillion, it shows Japan has some way to
go before it can swing the trade account back to surplus.
More MarketWatch news:
Asia Stocks blog: Back down we go
Former J.P. Morgan exec arrested in Hong Kong: report
Treasury's Jack Lew talks yuan, slowing China economy
Subscribe to WSJ: http://online.wsj.com?mod=djnwires