Yen soars, Asia stocks hit as Bank of Japan frustrates

HONG KONG: The yen soared on Fri small adjustments to its stimulus programme disappointed traders who had expected a huge boost to its arsenal.

that the bank did not cut borrowing costs further into negative territory, most other regional markets retreated.

After weeks of anticipation that the central bank would pump fresh cash into the economy, policymakers said only that they would boost its exposure to riskier investments, leaving a massive 80 trillion yen annual asset-buying programme unchanged.

the market’s high expectations,” Khoon Goh, head of Asia research - ing Group in Singapore, told

He added that while governor Haruhiko Kuroda indicated the bank could unveil fresh measures at its September meeting, “overall this is a huge disappointment for markets”.

The news sent the dollar tumbling to below 103 yen at one point from 104.20 yen earlier in the day, and well off the levels above 107 yen touched last week. In the afternoon it was at 103.50 yen, while the euro bought 114.51 yen from 116.60 yen.

The Nikkei stock index sank almost two percent at one point but bounced back to end 0.6 percent higher.

Among other markets Seoul sank 0.2 percent and Hong Kong was off 1.3 percent while Shanghai ended 0.5 percent down.

Singapore tumbled 1.5 percent but Sydney was up 0.1 percent.

In early European trade London fell 0.1 percent but Frankfurt rose 0.5 percent and Paris added 0.2 percent.

‘New phase’

days after the government in Tokyo launched a fresh programme worth 28 trillion yen to kickstart

European Union sparked promises of support from central banks and governments in a bid to fend off a feared hit to the global economy.

The need for more support was highlighted Friday by data showing the latest sign that Prime Minister struggling to gain traction.

Craig Erlam, senior market analyst, at OANDA, said: “Perhaps the days of investors looking to these central banks to provide a quick fix currency depreciation are broadly behind us and a new phase of constructive monetary spending is what is needed.”

On oil markets both main contracts were headed for a seventh straight day of losses as worries about a global supply glut return to the fore.

- ate each lost 0.5 percent and were headed towards the $ 40 mark, well down from the 2016 peaks crucial US holiday driving season comes to an end and temporary disruptions to output in Canada and Nigeria ease.