Asian stocks tread cautiously
ASIAN stock markets drifted yesterday and the dollar was virtually unmoved with investors biding their time as crucial central bank gatherings in the United States and Japan kick off.
The Fed heads into one of its most keenly awaited policy meetings after weeks of speculation that has fanned volatility across global trading floors, with investors split on whether it will lift interest rates.
At the same time opinion is divided on what the Bank of Japan’s intentions are, with expectations for fresh stimulus tempered by a lack of concrete promises from Tokyo, despite weak growth.
The uncertainty leading up to the meeting is keeping traders at bay, Chris Weston, chief market analyst in Melbourne at IG Ltd, said.
“No one is prepared to take on too much risk ahead of the Bank of Japan and the Fed Open Market Committee meetings,” he told Bloomberg News.
Tokyo’s Nikkei index swung to and fro through the day before ending 0.2 percent lower.
Hong Kong shed 0.1pc by the close and Shanghai lost 0.1pc following healthy gains on September 19. Sydney added 0.2pc and Seoul was 0.5pc higher, while Singapore shed 0.2pc.
Currency markets were also subdued ahead of the bank announcements, which are due today.
The dollar edged down to 101.70 yen from 101.88 yen in New York while the euro was at US$1.1185 from $1.1175.
“It’s difficult to buy into the market when you don’t know what will happen,” said Hiroyasu Iida, the head of investment research centre at Aizawa securities.