Asian stocks retreated from an eight-month high as consumer discretionary companies led losses and Bank of Japan Governor Haruhiko Kuroda’s opposition to so-called helicopter money dragged Tokyo equities lower.
The MSCI Asia Pacific Index declined 0.5 percent to 133.98 in Hong Kong, paring its advance this week to 0.2 percent. Japan’s TOPIX slipped 0.9 percent, led by exporters, trimming its gain for the week to 0.8 percent.
Investors focused on the comments from Kuroda, even after a Nikkei Shimbun report said Japan’s stimulus package could be as large as ￥30 trillion (US$283 billion).
At this stage there is “no need and no possibility for helicopter money,” Kuroda said in a BBC Radio 4 program that was aired on Thursday and that the broadcaster said was recorded on June 17. “At this moment, the Bank of Japan has three options with quantitative and qualitative easing with negative interest rates.”
These current policies can be expanded if needed and there are no significant limitations to further monetary stimulus, he said.
“The comments will disappoint investors who had been selling the yen in anticipation of the Bank of Japan announcing helicopter money at its meeting next week,” said Jasper Lawler, a London-based analyst at brokerage CMC Markets PLC.
“After the failure of its current quantitative easing program to boost inflation, helicopter money is one of the few remaining tools in the Bank of Japan’s arsenal,” Lawler said.
He added that Kuroda might have changed his opinion in the last month since he gave the interview, which came before the UK’s vote to leave the EU.
Global stocks added almost US$5 trillion in three weeks on bets central banks would stoke growth, pushing valuations on the Asia-Pacific index to the highest level this year. Earnings have also played a part, with positive surprises helping lift the S&P 500 Index to a record.
Some of that optimism subsided on Thursday, as signs faded that profits would be able to sustain equities at elevated valuations.
In Taipei, shares closed lower on Friday, as investors took their cues from a pullback on Wall Street overnight to lock in the gains they had built in recent sessions, dealers said.
Market sentiment turned cautious ahead of a policymaking meeting scheduled by the US Federal Reserve next week, with investors rushing to cut their holdings in the bellwether electronics sector, they said.
The silver lining was that foreign institutional investors remained on the buy side, which helped stabilize the broader market, helping the index remain sustainable above the 9,000 point mark at the close, they added.
The TAIEX closed down 43.42 points, or 0.48 percent, at 9,013.14, but rose 0.7 percent from the previous week’s 8,949.85, Taiwan Stock Exchange figures showed.
China’s Shanghai Composite Index declined 0.9 percent on Friday, sending the benchmark index to its first weekly drop in a month, as consumer and energy companies retreated. The Hang Seng China Enterprises Index slipped 0.3 percent.
Hong Kong’s Hang Seng Index fell 0.2 percent, retreating from a bull market. The gauge erased year-to-date losses this week after extending gains from a February low to 20 percent.
Australia’s S&P/ASX 200 Index decreased 0.3 percent, and South Korea’s KOSPI declined 0.1 percent. Singapore’s Straits Times Index slipped 0.2 percent.?
Indonesian stocks sank for a second session after the central bank refrained from cutting interest rates on Thursday. New Zealand’s S&P/NZX 50 Index, the world’s best performing developed-market gauge this year, advanced 0.2 percent.
Additional reporting by staff writer, with CNA
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