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Asia shares mixed, strong yen weighs on Tokyo

Asia's markets were mixed on Wednesday after a tumble on Wall Street, with Tokyo weighed by a stronger yen as the Bank of Japan held off fresh monetary easing measures and said the economy was picking up.

HONG KONG: Asia's markets were mixed on Wednesday after a tumble on Wall Street, with Tokyo weighed by a stronger yen as the Bank of Japan held off fresh monetary easing measures and said the economy was picking up.

Tokyo slipped 0.24 per cent, or 33.08 points, to 14,042.17, while Seoul lost 0.15 per cent, or 2.93 points, to close at 2,008.33.

Sydney was flat, edging up 4.25 points to 5424.6, while Shanghai gained 0.84 per cent, or 16.83 points, to 2,024.95. Hong Kong was also flat, ending up 1.84 points at 22,836.52.

The BoJ stood pat on its stimulus programme, saying growth was picking up pace despite worries that last month's sales tax rise will hit consumer spending.

Policymakers also dropped the word "deflation" from their post-meeting statement -- a possible signal that efforts to conquer years of falling prices could be paying off.

The bank said its moves to boost laggard growth were taking hold, with Japan's economy "expected to continue a moderate recovery".

The yen strengthened after the announcement, with the dollar buying 100.90 yen from above 101.30 yen before the BoJ statement -- which in turn weighed on Japanese stocks as a stronger currency dents the profitability of exporters.

While the announcement was expected, dealers were awaiting further clues about the BoJ's policy plans from a regular press briefing by bank governor Haruhiko Kuroda.

The decision came hours after data showed Japan's trade deficit narrowed in April as a hike in the sales tax hit imports, while exports jumped.

US shares took a dive on Tuesday in response to a barrage of mostly disappointing earnings from retailers, while downward pressure was increased after a Fed president called for interest rates to be hiked.

Reserve Bank of Philadelphia President Charles Plosser said borrowing costs may have to be raised sooner than later. While most analysts expect an increase well into next year, the dearth of any other strong catalysts led traders to take their cash off the table.

Since the start of the year the US central bank has been reducing its stimulus programme, which helps keep rates subdued, as the economy shows signs of improving. Markets will get a better insight into the thinking of the Fed's policy board when minutes from its most recent meeting are released later in the day.

The Dow sank 0.83 per cent, the S&P 500 fell 0.65 per cent and the Nasdaq 0.70 per cent.

On foreign exchange markets the euro fetched 138.32 yen and $1.3708 against 138.82 yen and $1.3701.

However, the baht edged up to 32.45 against the dollar from 32.52 a day after a mild sell-off Tuesday in response to the Thai army's declaration of martial law that capped almost seven months of deadly anti-government street protests.

Oil prices rose. The US benchmark, West Texas Intermediate for delivery in July, rose 78 cents to $103.11 in its first day of trading. The June contract ended Tuesday. Brent North Sea crude for July added 27 cents to $109.96.

Gold fetched $1,294.75 an ounce at 0845 GMT compared with $1,292.90 late Tuesday.

In other markets:

-- Taipei dropped 0.29 per cent, or 25.37 points, to 8,862.42.

Taiwan Semiconductor Manufacturing Co. was 0.41 per cent lower at Tw$120.5 while Hon Hai Precision lost 0.66 per cent to Tw$90.0.

-- Wellington fell 0.51 per cent, or 26.32 points, to 5,108.57.

Telecom was down 1.12 per cent at NZ$2.66 and Air New Zealand up 0.23 per cent at NZ$2.135.

-- Manila closed 1.75 per cent lower, shedding 120.35 points to 6,762.38.

Alliance Global Group eased 0.50 per cent to 29.90 pesos while Metropolitan Bank and Trust slipped 3.91 per cent to 86 pesos.

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