32149
Yuan at 4-1/2-Year Low
World Economy

Yuan at 4-1/2-Year Low

Asian stocks fell on Monday and China’s yuan hit fresh 4-1/2-year lows as plunging oil prices added to investors’ nervousness about riskier assets ahead of an expected US rate rise by the Federal Reserve later in the week.
The People’s Bank of China on Monday continued guiding the currency lower, setting the yuan/dollar official midpoint at its weakest since July 2011, Reuters reported.
China decision to loosen its grip on the yuan and allow slow but steady depreciation in recent weeks had added to concerns that the world’s second-biggest economy may be more fragile than expected.
MSCI’s broadest index of Asia-Pacific shares outside Japan hit a 2-1/2-month low and was last down 1.4%.
Japan’s Nikkei slumped more than 3% in early trade and was down 2.4% by late morning as falling commodity prices hit shares of energy companies and trading houses.
The Nikkei dropped 3.2% to 18,611.09 points by midmorning, the lowest since Oct. 22, as investors sold riskier assets.
South Korea’s Kospi retreated 1%. Australian shares dropped 1% and Shanghai stocks dipped 0.2%.
Investors’ focus now on is whether the market can withstand a US rate hike, which is excepted to be announced after the US Federal Reserve’s Dec. 15-16 policy review.
“If the Fed hikes a rate as expected, people are watching whether recently sold assets such as US shares, oil and the dollar will rebound,” said Yutaka Miura, a senior technical analyst at Mizuho Securities. “If they rebound, the market will likely stabilize, but if not, we have to prepare for another sell-off.”
Mining shares underperformed, with Inpex Corp stumbling 4.7% and Japan Petroleum Exploration shedding 3.5%.
Trading houses, whose earnings depend on commodity prices, also lost ground. Mitsubishi Corp slid 2.9% and Mitsui & Co declined 2.4%.
As investors became risk-averse, financials were sold as well. Nomura Holdings dropped 4.1% and Daiwa Securities Group fell 2.8%.
Exporters were also lower on the stronger yen, with Toyota Motor Corp falling 3.2% and Honda Motor Co shedding 3.1%.
Investors quickly looked past a closely watched central bank survey, which showed that Japanese business sentiment held steady in the three months to December.
The broader Topix dropped 2.4% to 1,512.11, with all of its 33 subsectors in negative territory. The JPX-Nikkei Index 400 fell 2.5% to 13,599.59.
 

 

Short URL : http://goo.gl/LQ31f8
  1. http://goo.gl/5LxNMn
  • http://goo.gl/4sq3nf
  • http://goo.gl/lpk5EA
  • http://goo.gl/ks3SFl
  • http://goo.gl/cpXwMl

You can also read ...

Both, Russia and China, have intensified efforts in recent years to settle bilateral trade not in US dollars, but in rubles and yuan. Gold is considered important by both countries.
The issue of when a global reserve currency begins or ends is...
Norway’s Sovereign Wealth Fund  Hits $1 Trillion
The Norwegian sovereign wealth fund, the largest in the world...
The IMF could write off its debt and lighten Greece’s burden.
“Beware of Greeks bearing gifts,” wrote the ancient Roman poet...
Just over a quarter of Aussies have amassed debts equal to three times their income.
Australians’ average weekly household income grew by A$213 ($...
Kazakh Economy Grows by 4.3%
The economic growth in Kazakhstan was at 4.3% since the...
Multinational digital firms, mostly based in the US, have pushed for globally harmonized rules that would provide predictability and limit the space for national governments to intervene in digital flows.
The increasing digitization of the global economy is changing...
Janet Yellen
As the Fed starts unwinding the stimulus it provided to snap...
Ukraine Raises $3b in First Bond issue
Ukraine has raised $3 billion in its first sovereign bond...

Trending

Googleplus