(menafn – ecpulse)
Amid lower-than-usual volumes with Japan and Australia being the only major Asian markets trading today as markets in Hong Kong, China, India and South Korea are closed for holidays, the MSCI Asia Pacific Index fell 0.4% at 13:47 in Tokyo.
Nikkei 225 dropped 1.78% after personal spending dropped and the manufacturing slowed in the US, which determined the Japanese companies to expect a drop in earnings as the outlook for exports is worsening.
The yen strengthened today, as investors are losing their appetite for risk, ahead of this week’s ECB’s rate decision, Spain’s first bond auction since the S&P downgraded it last week and the upcoming elections in France and Greece.
Meanwhile in Australia the S&P/ASX 200 rose 0.75% on Tuesday after the Reserve Bank of Australia cut the interest rate by 50 basis points to a two years low at 3.75% from 4.25%, which is the biggest reduction in 3 years.
As inflation slowed to a 13-year low while exports, house prices, confidence and manufacturing weakened the central bank reduced the benchmark interest rate more than expected to “help improve financial conditions” and “confidence”.
Meanwhile in China the official PMI manufacturing index expanded for a fifth month during April, reaching the highest in 13 months, although it was slightly below expectations of 53.6, signaling the economy is heading for a soft landing.
However, as Asia’s biggest economy seems to be strengthening in the second quarter of the year after Europe’s debt crisis hurt exports in Q1 which slowed to 8.1%, pressures on officials to further ease their monetary policy are dropping.
Pfizer and Motorola are among the companies scheduled to report earnings today; the manufacturing PMI will be released from UK; later in the day the US will release its ISM manufacturing while most of Europe’s markets are closed Labor Day.
In Japan, Nikkei 225 fell by 0.78% closing at 9350.95 while Topix fell 1.84% to 789.49 as the yen gained after demand on safe haven increased.
In Australia, the S&P/ASX 200 rose 0.75% to 4429.50 after the central bank cut the interest rate by 50 basis points to 3.75%.
New Zealand’s NZX 50 index rose 0.60% points to 3577.32. Jakarta Composite Index fell 0.06% to 4178.36.