Asian markets closed in red on Monday, with Chinese shares extending losses from the past two weeks despite a surprise interest rate cut. The People’s Bank of China cut benchmark interest rates for a fourth time since November and held open the door to more cuts, as the monetary authority steps up policy easing in the face a deepening slowdown. The 25 basis point cuts bring the one-year lending rate down to 4.85% and the equivalent deposit rate to 2% effective June 28. Hong Kong Retail Sales rose to a seasonally adjusted annual rate of -0.1%, from -2.2% in the preceding month.
Bank of Japan Governor Haruhiko Kuroda warned that the central bank is alert to downside risks to its aims to anchor 2% inflation by the first half of fiscal 2016. Japan’s consumer inflation has slipped back to around zero due partly to the temporary influence of low oil prices. The BoJ’s initial plan was to anchor 2% inflation in about two years from April 2013, when the bank launched aggressive easing. The BoJ expanded the easing program to 80 trillion yen in government bond buying annually last October as some board members thought falling energy prices would dampen inflation expectations. Japan’s industrial production fell to a seasonally adjusted -2.2%, from 1.2% in the preceding month. The retail sales fell to a seasonally adjusted annual rate of 3.0%, from 4.9% in the preceding month whose figure was revised down from 5.0%.
Asian Indices Last Trade Change in Points Change in % Shanghai Composite 4,053.03 -139.84 -3.34 Hang Seng 25,966.98 -696.89 -2.61 Jakarta Composite 4,882.58 -40.43 -0.82 KLSE Composite 1,691.92 -18.55 -1.08 Nikkei 225 20,109.95 -596.20 -2.88 Straits Times 3,280.18 -40.72 -1.23 KOSPI Composite 2,060.49 -29.77 -1.42 Taiwan Weighted 9,236.10 -666.79 -6.73
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