Asian markets mostly dip as US, Japan bank meetings eyed

A man uses a mobile phone in front of an electronic stock indicator of a securities firm in Tokyo. (Photo source: AP/Shizuo Kambayashi)

HONG KONG: Asian markets mostly dipped on Tuesday (Apr 26) on investor caution before Federal Reserve and Bank of Japan policy meetings later in the week, while oil prices rallied after the previous day's sharp losses

Having piled up healthy gains last week, traders took a step back before the Fed meeting which they hope will provide some forward guidance on its policy plans, while the corporate earnings season also kicks off.

"Overall we're in wait-and-see mode," Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, told Bloomberg News. "It's easier for investors to lighten their positions so damage will be limited in case something unexpected happens in US and Japanese monetary policy."

After the turmoil across world markets at the start of the year, the Fed has lowered expectations of rate rises this year - saying it would closely watch overseas developments before moving.

Traders have predicted the next rise will be towards the end of the year but every utterance from the bank will be pored over for clues about its thinking.

Japan's Nikkei index ended 0.5 per cent lower, with the yen holding Monday's gains against the dollar despite speculation the country's central bank will ramp up its stimulus when a two-day policy meeting ends Thursday.

The dollar was at ¥110.96, having pushed towards ¥112 at the end of last week on speculation the Bank of Japan would unveil fresh measures.

The BoJ has been tipped to further ease monetary policy after this month's double earthquake in the south which caused factory closures at a time when the economy is already stuttering.

MITSUBISHI CRASH

Wednesday sees the start of the earnings season, with Sony and Nintendo among a slate of big-name firms set this week to report results for the fiscal year through March.

Among other markets Sydney lost 0.3 per cent while Singapore shed 0.2 per cent and Wellington lost more than one per cent.

However, Hong Kong closed up 0.5 per cent thanks to a late rally while Shanghai added 0.6 per cent after losing about four per cent last week. Seoul also reversed initial selling to close up 0.3 per cent.

In early European trade London and Frankfurt each gained 0.6 per cent and Paris added 0.2 percent.

The two main crude oil contracts - West Texas Intermediate and Brent - were up in the afternoon, having swung through the day.

They dived on Monday on a report that Saudi Arabia was close to finishing a key oilfield expansion to help it boost output. Investors are now awaiting a US stockpiles report Wednesday that will give a handle on the state of the world crude market.

In Tokyo trade Mitsubishi Motors plunged almost 10 per cent, a fifth straight hammering that has seen it give up more than 50 per cent and wiped billions off its valuation owing to a fuel-efficiency scandal linked to hundreds of thousands of cars.

The latest collapse came after a report that the carmaker may have used fuel-efficiency tests inconsistent with government guidelines since the 1990s.

After the market closed the firm admitted using improper fuel tests since 1991 but said it did not know how many models were affected.

- Key figures around 0800 GMT -

Tokyo - Nikkei 225: DOWN 0.5 per cent at 17,353.28 (close)

Shanghai - Composite: UP 0.6 per cent at 2,964.70 (close)

Hong Kong - Hang Seng: UP 0.5 per cent at 21,407.27 (close)

London - FTSE 100: UP 0.6 per cent at 6,295.19

Euro/dollar: UP at US$1.1268 from US$1.1266 Monday

Dollar/yen: DOWN at ¥110.96 from ¥111.21

New York - Dow: DOWN 0.2 per cent at 17,977.24 (close)