As the Nikkei Stock Average NIK, -0.32% fell 0.3% as the yen USDJPY, -0.12% continued to strengthen against the U.S. dollar, while a speech by a senior Bank of Japan official failed to clear uncertainty over the central bank’s future policy direction. All eyes will now be on the BOJ’s next meeting on Sept. 20-21.
Bank of Japan Deputy Gov. Hiroshi Nakaso on Thursday said it wasn’t right to take negative rate reductions off the table, just because of their potential harm to bank profits, suggesting his openness to further rate cuts. But analysts were skeptical.
Putting rates further into negative territory is difficult to implement amid a lack of public support, said Katsunori Kitakura, strategist at Sumitomo Mitsui Trust Bank. “They didn’t expect that much backlash from the government or the public,” he said, noting that monetary policy is fast approaching the limits of its effectiveness.
Nintendo 7974, +13.20% was among the best-performing big-cap stocks in the region on Thursday, closing up 13% and reversing some of the late-July pullback seen after shares surged following the release of “Pokémon Go.” However, broader equity weakness in Japan came on the BOJ uncertainties, as well as a revised economic report that showed inflation slowing and wage growth stagnant.
Elsewhere, Australia’s S&P/ASX 200 XJO, -0.71% ended down 0.7%, the South Korean Kospi SEU, +0.09% added 0.1%, and Singapore’s Straits Times Index was off 0.4%..
Overnight, Nintendo 7974, +13.20% unveiled “Super Mario Run,” the latest push into mobile gaming for a company that has long stayed out of the sector. The game will launch in December on smartphone platforms beginning with Apple Inc.’s AAPL, +0.61% iOS. Analysts forecast a greater financial boost to Nintendo from the coming release than from “Pokémon Go.”
“Earnings contribution was said to be limited from ‘Pokemon Go,’ but Mario is Nintendo’s content...We can expect earnings improvement,” said Hideyuki Ishiguro, senior strategist at Daiwa Securities.
Apple, meanwhile, unveiled the iPhone 7 to mixed reviews. While its stock rose slightly in the U.S. on Wednesday, the tech firm’s Midas touch didn’t extend to Taiwan, where shares of key manufacturing suppliers — Hon Hai Precision Industry Co. 2317, -1.26% , Wistron Corp. 3231, -1.29% and Compal Electronics Inc. 2324, -0.26% — were down modestly. Taiwan’s benchmark Taiex ended up 0.1%.
Apple's new iPhone and Watch may not look all that different but there are some big changes, for better or worse.
On Thursday, the release of China’s August trade data made few ripples as liquidity has stayed tight and the country’s foreign-exchange reserves hit a five-year low. Still, the smaller-than-expected drop in China’s exports last month and a surprise increase in imports — the first growth in nearly two years — helped drive Hong Kong’s Hang Seng Index HSI, +0.75% up 0.7%, while the Shanghai Composite Index SHCOMP, +0.13% closed up just 0.1%.
In Australia, institutional selling and a recalibration of expectations surrounding rates in the country following the Reserve Bank of Australia’s decision to keep interest rates unchanged pressured stocks.
“The financials are taking the big points out of our market today,” said Chris Weston, chief market analyst at IG Market Ltd.
Also, rising oil prices CLV6, +1.78% offered little support to Australia’s commodity-reliant market, with shares of key producers down. Santos Ltd. STO, -2.86% dropped 2.9%, while Woodside Petroleum WPL, -1.58% shed 1.6%. Brent LCOX6, +1.54% , the global crude-oil benchmark, was recently up 1.3% at $48.61 a barrel.
Looking ahead, the market will be watching for the European Central Bank’s announcement on interest rates and for the release of U.S. initial jobless claims data later on Thursday. The latter will likely be seen as further ammunition in the case for a rate increase by the U.S. Federal Reserve if the number beats the consensus figure of 265,000.