Declines in Asian equity markets bode ill for Hong Kong when trading resumes on Wednesday, and for mainland China when traders return on Friday
The US dollar weakened against major currencies for the second day on Tuesday, weighing down on the stock prices of Asian exporters and technology firms, following Wall Street declines amid concerns over Donald Trump’s tightening of US immigration rules.
The dollar weakened by as much as 0.5 per cent to ¥113.24 against the yen, dropping by a combined 1.4 per cent since Friday. The US currency also weakened 0.2 per cent against the euro, dropping to 1.0715, while falling 0.1 per cent against the sterling, declining to 1.2504 per pound.
In the offshore yuan market, the dollar bought 6.8548 yuan, down 0.1 per cent from Monday’s 6.8633 yuan. Onshore yuan trading has been closed since January 27 for Lunar New Year holidays.
“Investor sentiment has quickly turned, as Tumpenomics’ rally has given way to a vote of no confidence from investors who are growing leery of Trump’s agenda and are restless about the lack of focus on the fiscal front,” said Stephen Innes, a senior currency trader at Oanda Asia Pacific.
Currency market gyrations spilled over to Asian equities during the holiday-shortened trading week, with bourses closed in Hong Kong, Shanghai, Shenzhen and Taiwan.
Stock indexes fell across Asia, with the Nikkei 225 Index dropping 1.7 per cent in Tokyo to close at 19,041.34. The Kospi Index in Seoul fell 0.8 per cent to end at 2,067.57.
Technology stocks led declines in Tokyo, with NEC Corp sinking 17.4 per cent to 261 yen, while Canon Inc dropped 1.4 per cent to 3,345 yen.