Nikkei dips below 20,000; Chinese stocks stable after Monday’s losses
Asian shares were broadly weaker Tuesday, with Chinese stocks stabilizing after Monday’s slump and Japanese stocks falling in reaction to the dollar’s weakness.
Tokyo investors returned from their Monday holiday and sold shares in reaction to the slide in the dollar on Friday after disappointing U.S. economic data added to skepticism about more Federal Reserve rate increases this year.
The dollar has continued to weaken with the euro getting above $1.15 for the first time in 14 months in Asian trading.
The Nikkei fell 0.9% to below the psychologically-important 20,000 level as the dollar slid to Yen112.20 Tuesday morning, from Yen112.63 in late New York trading on Monday. Exporters were among the biggest decliners in Japan because their offshore earnings are eroded by the yen’s strength.
The Wall Street Journal Dollar Index fell 0.3%.
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Stocks of Japanese insurers also lagged as bond yields fell, as has been the case in recent days. Dai-ichi Life (8750.TO) and Mitsubishi UFJ (MTU) slid at least 2% Tuesday.
Market participants are looking to policy statements on Thursday from both the Bank of Japan and the European Central Bank.
Investors are expecting hawkish comments from the ECB, says Hisao Matsuura, chief strategist at Nomura Japan. A hawkish ECB…