Tokyo, Japan (BBN) – Asia markets fell on Tuesday, with Japanese shares dropping sharply, tracking declines on Wall Street overnight on jitters over a new immigration measure taken by the Trump administration.
The yen strengthened against the dollar after the Bank of Japan (BOJ) kept its monetary policy steady as expected on Tuesday, reports CNBC.
The Japanese currency rose against the greenback from levels near 113.68 before the BOJ’s decision to around 113.48 at 2:51pm HK/SIN, and stronger than levels near 115.20 touched in the previous week.
The Nikkei Stock Average dropped 327.51 points, or 1.69 per cent, to 19,041.34, while the Topix fell 22.10 points, or 1.43 per cent, to 1,521.67.
The BOJ kept its policy stance unchanged, but raised its gross domestic product (GDP) forecast to 1.4 per cent for the current fiscal year ending March 31, from a previous prediction of 1.0 per cent growth made in October.
The BOJ said in its policy statement it expected inflation to rise to around its target of 2 per cent by fiscal 2018.
The yen’s strength on Tuesday sent stocks lower across the board, with export stocks selling off.
Shares of Toyota closed down 1.80 per cent, Honda fell 2.81 per cent, Nissan was down 1.45 per cent, Sony was off by 2.26 per cent and Fujitsu was down 4.76 per cent.
Nintendo shares finished down 1.89 per cent as investors looked ahead to the Japanese gaming giant’s nine-month earnings results due after the Tokyo market close.
Elsewhere, government data released Tuesday morning showed Japanese household spending fell 0.3 per cent in December from a year earlier, less than the median estimate of a 0.6 per cent decline, according to Reuters.
Meanwhile, seasonally adjusted jobless rate was flat at 3.1 percent in December, in line with a Reuters estimate, while industrial output rose 0.5 per cent in December from a month earlier.
Australia’s benchmark ASX 200 closed down 40.61 points, or 0.72 per cent, at 5,620.90, while in South Korea, the Kospi fell 16.02 points, or 0.77 per cent, to 2,067.57.
In company news, shares of NEC dropped 17.41 per cent after the Japanese communications equipment maker slashed its profit outlook for the year ending March 31 to 30 billion yen ($264 million) from an earlier prediction of 100 billion yen, reported Reuters.
The session in Asia followed a negative closing stateside, as a new measure taken by the Trump administration on immigration sent jitters through the market.
President Donald Trump signed an executive order late Friday that would temporarily bar entry into the US to Iraqi, Syrian, Iranian, Sudanese, Libyan, Somali and Yemeni citizens. The order seeks “extreme vetting” procedures for those it did allow to enter the US. In signing the order, Trump said he pledged to “keep radical Islamic terrorists out of the United States of America.”
The Dow Jones industrial average fell 122.65 points, or 0.61 per cent, to close at 19,971.13.
The S&P 500 dropped 13.79 points, or 0.6 per cent, to end at 2,280.90.
The Nasdaq composite slid 47.07 points, or 0.83 per cent, to close at 5,613.71.
“Markets are struggling with the “Jekyll and Hyde” nature of U.S. President Donald Trump,” said analysts at Singapore’s DBS Bank in a note. “Put simply, markets cheered Trump’s
expansionist plans in November-December only to come face to face with his protectionist fangs in January.”
On Tuesday during Asian hours, US futures traded lower; the Dow mini futures were off by 51 points, the Nasdaq e-mini futures were down 14 points and the S&P e-mini futures contract slipped 6 points.
In the broader currency market, the dollar index, which measures the greenback against a basket of currencies, fell slightly to 100.37.
The Australian dollar traded at $0.7561, while the euro fetched $1.0697.
Oil prices also declined on Monday on the back of news that pointed to weekly increase in US drilling activity.
The number of active US oil rigs rose last week to the highest level since November 2015, Reuters reported citing Baker Hughes data.
On Tuesday, US crude continued the downward trend, shedding 0.44 per cent to $52.40 a barrel, after finishing down 54 cents a barrel during US hours on Monday.
Global benchmark Brent slipped 0.18 percent on Tuesday to $55.13.
Markets in China and Hong Kong were closed for the Lunar New Year public holidays.