Japanese shares sold off and the yen surged against the dollar Thursday after the Bank of Japan's (BOJ) decision to keep monetary policy steady disappointed a section of the market betting on further stimulus.
The Nikkei 225 plummeted 624.44 points, or 3.6%, to 16,666.05, compared with a 1.4% gain before the decision.
The Hang Seng Index in Hong Kong advanced 26.43 points, or 0.1%, to 21,388.03
The yen moved sharply higher, with the U.S. dollar/yen pair dropping 3% to 108.14, compared with the 111 level it traded at before the decision.
Following the BOJ's decision, and the yen's subsequent strength, major Japanese exporters saw their shares tumble. Toyota closed down 3.3%, Nissan fell 4.3% and Honda was down 4.2%. A stronger yen is usually a negative for exporters as it reduces their overseas profits when converted into local currency.
Japanese banking stocks also sold off sharply, with shares of Mitsubishi UFJ closing down 6%, SMFG also down 6% and Nomura shares tumbling 10.1%. Nikkei index heavyweight Fast Retailing sold off 5.8%
Prior to the BOJ decision, government data showed Japan's core consumer price index, which excludes fresh food prices, dropped 0.3% on-year in March. Reuters said economists' median estimate was for a 0.2% annual gain.
In company news, shares of Mitsubishi Motors advanced 6.4%Thursday, beating the main index, but remain down over 50% year-to-date.
On Wednesday, the company announced earnings for the financial year that ended in March 2016. Operating income was up 1.8% on-year to 138.4 billion yen ($1.2 billion U.S.), above expectations of 129.62 billion yen, according to a Thomson Reuters survey.
Mitsubishi, however, did not issue an earnings guidance for the current financial year.
Earlier in the week, the troubled Japanese automaker said an internal investigation found it had falsified mileage tests since 1991. But on Thursday, Reuters reported the automaker as saying its vehicles sold in the United States from 2013 have accurate mileage readings.
Smartphone maker Samsung Electronics reported an 11.7% on-year increase in first quarter operating profit to 6.68 trillion won ($5.82 billion U.S.). Operating profit of its mobile division was up from a year earlier to 3.89 trillion won, while operating profit for its semiconductor business fell from 2.93 trillion won in first quarter of 2015 to 2.63 trillion won.
Samsung shares closed down 2.7%
Elsewhere, early morning Thursday, the Reserve Bank of New Zealand (RBNZ) left its official cash rate unchanged at 2.25%
The Australian dollar was up 0.8% at $0.7650 U.S., after dropping close to 1.8% at one point in the Wednesday session following fresh probability of monetary easing from the Reserve Bank of Australia (RBA) after inflation unexpectedly fell.
Energy plays finished mixed, with Santos adding 3.5%,,Woodside Petroleum up 1%. Japanese oil stocks saw steep losses, with Inpex down 3%
CHINA
The Shanghai CSI 300 index slumped 5.33 points, or 0.2%, to 3,160.58, Chinese mainland shares of Sinopec closing down 2.6%
In other markets;
In Taiwan, the Taiex Index doffed 89.18 points, or 1%, to 8,473.87
In Korea, the Kospi index retreated 14.47 points, or 0.7%, to 2,000.93
In Singapore, the Straits Times Index removed 12.42 points, or 0.4%, to 2,862.30
New Zealand’s NZX 50 recovered 39.58 points, or 0.6%, to 6,789.98
The ASX 200 restored 37.72 points, or 0.7%, to 5,225.43
