Stocks slide in Asia as Japan holds policy steady

By ELAINE KURTENBACH

TOKYO (AP) — Stock markets slid Tuesday in Asia, as Japan's central bank ended a policy meeting with no fresh stimulus or moves to curb bond market volatility.

Uncertainty also weighed on emerging markets in Asia, with mainland China's financial markets closed for a national holiday following the weekend release of discouraging data for the world's second largest economy.

Japan's Nikkei stock index fell 1.1 percent to 13,354.60 a day after soaring 4.9 percent following an upward revision of first quarter economic growth data.

A statement issued by the Bank of Japan at midday called for no major policy changes but reiterated its expectation for a moderate recovery in coming months, noting an improvement in exports and resilient demand in Japan.

However, the central bank offered no new monetary easing or measures to curb volatility in government bond prices that has alarmed some in recent weeks.

Regionally, an overnight decline on Wall Street weighed on sentiment, while investors in Hong Kong awaited the reopening of China's markets on Thursday, following the Dragon Boat festival.

"During the holiday, the data from China was not so good. It was below market expectations, so investors are waiting," said Linus Yip, a strategist at First Shanghai Securities.

Hong Kong's Hang Seng index was down 1.1 percent at 21,389.09, while Korea's KOSPI slipped 0.7 percent to 1,919.33. Shares were lower in Taiwan, the Philippines, Indonesia and Singapore but rose in Australia.

A decision by the Standard & Poor's ratings agency to raise its outlook Monday for its credit rating on the U.S. government's long-term debt did little to boost spirits, as the Dow Jones industrial average slipped 0.06 percent, or 9.53 points to 15,238.59. The broader S&P 500 index was down 0.03 percent at 1,642.81

In Europe, the FTSE 100 index of leading British shares edged down 0.2 percent to 6,400.45 while Germany's DAX rose 0.6 percent to 8.307.69. The CAC-40 in France fell 0.2 percent to 3,864.36.

Over recent weeks, investors have grown fearful that the Federal Reserve will reduce the amount of financial assets it buys in the markets — so-called tapering.

The prospect of unchanged Fed policy in the near-term, which became more likely last week following the release of strong job numbers, has weighed on the dollar. The euro rose to $1.3270 from $1.3261 late Tuesday in New York. The dollar fell to 98.18 yen from 98.70 yen.

Oil prices held steady, with the benchmark rate down 2 cents at $95.75 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 26 cents to close at $95.77 per barrel on the Nymex on Monday.

See the original article >>