Nikkei In Tokyo Down 1%, Hong Kong Banks Lift Mortgage Rates

Arjun Pandit
19 Sep, 2023
Mumbai

Financial markets in Asia traded mixed and investors avoided large trades ahead of rate decisions by several central bankers this week. 

Market indexes in Tokyo edged lower after advancing for two weeks as investors await the rate decisions from the U.S. Federal Reserve on Wednesday and from the Bank of Japan on Friday. 

The U.S. Federal Reserve is expected to hold its target rate range for the second time between 5.25% and 5.50% and investors will be looking for clues on the economy's health. 

The Bank of Japan is also expected to keep its ultra-loose monetary policy intact but policymakers are expected to provide deeper insights about the yield curve management and the progress in keeping the inflation near 2%. 

Market indexes in Hong Kong traded near a four-week low on the ongoing property market woes and continued weakness in tech stocks. 

Hong Kong property prices are expected to decline between 5% and 10% by the year's end after seven largest banks lifted mortgage rates for new loans by 50 basis points from Monday.  

Seven banks, which control about 80% of Hong Kong property market, including HSBC, Standard Chartered Bank, Bank of China, Hang Seng Bank, China Construction Bank and Bank of East Asia raised rates ahead of the U.S. Federal Reserve taking its rate decision on Wednesday. 

The Hong Kong dollar has been pegged to the U.S. dollar since 1983, and the Hong Kong Monetary Authority, adjusts rates following the rate revisions by the U.S. Federal Reserve, has lifted rates by 5.25 percentage points since March 2022.  

Market indexes in Shanghai lacked direction and retained downward bias despite the People's Bank of China chief Pan Gongsheng said regulators will take steps to improve international trade and climate for foreign investors. 

Despite assurances from regulators, capital outflow from China remained strong as reflected in the offshore yuan exchange rate. 

The Chinese yuan traded near a 17-year low of 7.30 against the U.S. dollar and ahead of the rate decisions in the U.S. and other countries. 

 

Asia Market Indexes 

In Tuesday's trading, the Nikkei index decreased 1.0% to 33,208.71 after tech stocks continued to drift lower ahead of the rate decisions this week. 

In China trading, the Shanghai SSE Composite index inched up 0.02% to 3,126.52 and the Hang Seng index increased 0.02% to 17,933.66. 

Elsewhere in the region, the KOSPI index decreased 0.4% to 2,563.69 and financial markets in India were close to celebrate Ganesh Chaturthi. 

In August, the Nikkei index fell 0.6%, the SSE Composite index declined 5.2%, the Hang Seng index fell 8.2% and the KOSPI index decreased 4.2%.