By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — After spending most of the day deep in negative territory, Japanese stocks swung upward in the afternoon to end with only mild losses, while other Asia markets also retreated.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.94% ended 0.2% down at 13,289.32 after trading some 2% lower earlier in the day, with the benchmark recovering as the dollar rebounded against the yen.
Markets in China — including those in Hong Kong and Shanghai — were closed for the Dragon Boat Festival.
Japan had led the losses for Asia after the dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0229% fell by almost 2 full yen overnight to ¥96.22, having bought more than ¥98 at Tuesday’s Japan stock close.
But the dollar staged a modest rebound during the East Asian afternoon, hitting ¥96.77 by the time Tokyo closed for trading.
The dollar’s drop followed the Bank of Japan’s policy decision Tuesday, which contained no new easing moves.
“There appeared to be some heightened anxiety levels across Asian markets today, as traders contemplate a world without additional economic stimulus,” CMC Markets senior trader Tim Waterer wrote Wednesday.
“There may have been some unrealistic hopes that the BOJ would have come up with some fresh stimulus ideas, and when this didn’t eventuate, it set the ball rolling in terms of selling momentum,” he wrote.
The dollar traded above ¥100 early last week but has remained below that level since Japanese Prime Minister Shinzo Abe announced a slate of economic reforms — referred to as the “third arrow” of his three-pronged push to revive the nation’s fortunes, along with fiscal stimulus and monetary easing.
Chapdelaine FX managing director Douglas Borthwick compared Abe’s campaign unfavorably with European Central Bank President Mario Draghi’s actions to combat the euro-zone debt crisis.
“The ECB carries a bazooka into the currency wars, as Draghi pledges to do ‘whatever it takes,’ [while] Japan’s Prime Minister Abe is fighting with a bow and arrow,” he wrote Tuesday. “The market is taking the view that Japan may not have either the stomach or the capacity to follow through with Prime Minister Abe.”
But the yen’s move back lower late Wednesday helped send some Japanese exporter shares swinging back to gains, with Nikon Corp. /zigman2/quotes/203281219/delayed JP:7731 -0.98% /zigman2/quotes/203151879/composite NINOF +7.76% up 1.7%, and Mitsubishi Heavy Industries Ltd. /zigman2/quotes/202419396/delayed JP:7011 +1.05% /zigman2/quotes/206985358/composite MHVYF +1.94% rallying 3.5%.
Still, many major names were unable to fully recover, with Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 -0.70% finishing down 1.1%, Renesas Electronics Corp. /zigman2/quotes/203872935/delayed JP:6723 -4.96% /zigman2/quotes/201351352/composite RNECY -4.58% losing 2.4%, Toyota Motor Corp. /zigman2/quotes/203803129/delayed JP:7203 -0.56% /zigman2/quotes/200537742/composite TM -0.46% off 1.8%, and Nissan Motor Co. /zigman2/quotes/208298710/delayed JP:7201 -1.67% /zigman2/quotes/207656007/composite NSANY -1.66% surrendering 2.3%.
Hitachi Ltd. /zigman2/quotes/203839937/delayed JP:6501 +0.03% /zigman2/quotes/203416411/composite HTHIF +1.83% ended on an upnote, however, rising 1.1% after a Nikkei news report that the conglomerate had secured an order to supply trains for a light-rail project in Vietnam’s Ho Chi Minh City.
Panasonic Corp. /zigman2/quotes/201785256/delayed JP:6752 +0.04% /zigman2/quotes/201732539/composite PCRFF +0.95% added 1.6% after a separate Nikkei report that China’s Huawei Technologies Co. would double by value its procurement of parts from Japan over the next several years, with Panasonic as one of the beneficiaries.
But Tuesday’s losses on Wall Street — with a triple-digit loss for the Dow industrials /zigman2/quotes/210598065/realtime DJIA +0.15% and a 1% fall for the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.81% — weighed on financials around Asia.
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In Tokyo, Mitsubishi UFJ Financial Group Inc. /zigman2/quotes/207520099/delayed JP:8306 +0.69% lost 1.8%, Dai-ichi Life Insurance Co. /zigman2/quotes/208507587/delayed JP:8750 -0.25% /zigman2/quotes/200865545/composite DCNSF +0.88% closed 2.5% lower, and Resona Holdings Inc. /zigman2/quotes/203178794/delayed JP:8308 -1.10% /zigman2/quotes/201424788/composite RSNHF +1.00% pulled back 3.2%.
Similarly, many Australian banks saw selling, with National Australia Bank Ltd. /zigman2/quotes/210431826/delayed AU:NAB +1.01% /zigman2/quotes/205253475/composite NAUBF -0.09% , Westpac Banking Corp. /zigman2/quotes/203084975/delayed AU:WBC +0.56% /zigman2/quotes/210300378/composite WEBNF -1.85% and Australia & New Zealand Banking Group /zigman2/quotes/205482049/delayed AU:ANZ +0.24% /zigman2/quotes/204542251/composite ANEWF +0.42% dropping 1.2% apiece.
Mining stocks also took a toll on the Sydney market after a decline in many commodity prices, with Fortescue Metals Group Ltd. /zigman2/quotes/202351558/delayed AU:FMG +0.29% /zigman2/quotes/204116626/composite FSUMF +2.06% down 3.2%, BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP -0.06% /zigman2/quotes/208108397/composite BHP +0.45% slipping 0.4%, and Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM -1.61% /zigman2/quotes/206026738/composite NCMGF -0.50% finishing down 0.8% after the gold producer told Australia’s securities exchange that it didn’t break any share-listing rules related to the timing of the company’s recent restructuring announcement.
Early weakness in Australia briefly sent the S&P/ASX 200 into a technical correction, defined as a 10% drop from the most recent high.
In South Korea, Samsung Electronics Co. /zigman2/quotes/209800866/delayed KR:005930 -2.06% /zigman2/quotes/202367843/composite SSNLF +30.66% slipped 0.3%, after its shares dropped 2.5% Tuesday amid concerns over sales for its new Galaxy S4 smartphone.
Credit Suisse said it held the shares’ rating at outperform, and that the recent losses for Samsung offered a buying opportunity, according to Dow Jones Newswires.