Asian Shares Close Mute as Investors Anticipate Fed, BoE Meetings

By Investors Hub

Asian stocks ended Tuesday’s session on a muted note after the Bank of Japan tweaked its policy to make its stimulus program more flexible and data showed manufacturing growth in China slowed in July amid a worsening trade dispute with Washington.

Traders also awaited cues from the Federal Reserve and Bank of England monetary policy announcements later this week.

The Federal Reserve’s monetary policy announcement is due on Wednesday, with traders likely to keep a close eye on the accompanying statement for clues about the outlook for interest rates.

The Bank of England is widely expected to increase rates by a quarter point when it concludes its policy meeting on Thursday.

China’s Shanghai Composite Index rose 7.35 points or 0.3 percent to 2,876.40 after the release of official manufacturing data. Hong Kong’s Hang Seng Index dropped 150.12 points or 0.5 percent to 28,583.01.

A gauge of Chinese manufacturing activity slid to 51.2 in July from 51.5 a month ago, while analysts expected the index to ease marginally to 51.3. The non-manufacturing PMI dropped to 54.0 from 55 in June.

Japanese shares ended on a lackluster note as economic data proved to be a mixed bag and the Bank of Japan announced steps to make its monetary policy flexible.

The Nikkei 225 Index closed marginally higher at 22,553.72, while the broader Topix Index fell 0.8 percent to 1,753.29.

The Bank of Japan kept its monetary policy steady, as widely expected, but announced policy tweaks to make its policy framework more flexible for the long-term yield target.

On the data front, industrial output in Japan was down 1.2 percent year-on-year in June, the Ministry of Economy, Trade and Industry said. That missed forecasts for an increase of 0.6 percent following the 4.2 percent jump in the previous month.

The jobless rate in Japan came in at a seasonally adjusted 2.4 percent in June, exceeding expectations for 2.3 percent and up from 2.2 percent in May.

Australian shares fluctuated before closing roughly flat. The benchmark S&P/ASX 200 Index finished marginally higher, while the broader All Ordinaries Index ended little changed with a negative bias.

BHP Billiton rallied 2 percent on expectations the mining giant will pay its biggest ever dividend next month. Telecom firm Telstra rose 1.1 percent to extend gains for the third day after announcing a management shakeup.

Banks ended narrowly mixed, while energy majors such as Origin Energy, Oil Search and Woodside Petroleum climbed 1-2 percent. Gold miner Regis Resources slumped as much as 10.8 percent after releasing its quarterly update.

The total number of building approvals issued in Australia surged up by 6.4 percent in June, reversing a 2.5 percent slump in May, a government report showed. That was well above the 1.0 percent increase economists had forecast.